Author Archives: ghotchkiss

What a Social Media “Like” Should Really Mean

Originally posted in Mediapost’s Search Insider on October 3, 2013

Italy’s Agriturismo program has been a success by any measure you might want to use. Since the initial legislation was passed in 1985, thousands of small farms through Italy, teetering on the edge of extinction, have been thrown a financial lifeline by letting operators supplement their income  welcoming tourists to “stay on the farm.” The program includes one-time renovation grants and an ongoing marketing program. Today, there are almost 3,500 agriturismos throughout Italy. Many of these have sprung up just in the past decade. The program brings the market directly to the farm, allowing onsite sales of products to guests and showcasing the homegrown produce in the agriturismo’s restaurant.

The program’s success, however, has superheated the competition for tourism among the operators. In Tuscany, where I stayed at one such farm, there are 1,000 agriturismos, almost one third of the total number in Italy. You literally can’t throw a Tuscan stone without hitting some type of tourist-targeted operation. This competitive environment is made even more fervent when you consider that almost every restaurant in Italy is also an independent operation. There are no big chains. All these businesses are literally mom and pop (sorry, Momma and Poppa) operations. They run on a shoestring. There is little to no money for advertising. If ever there was a test bed for guerilla marketing, this is it.

Here, online ratings are the currency of choice. A top spot in an online directory is the difference between life and death for these businesses. In this almost perfect but unflinchingly brutal adaptive environment, if you’re terrible, you die quickly. If you’re mediocre, you die slowly. If you’re good, you stumble along. And for a very few exceptions, if you’re excellent, you may do OK and even prosper, relatively speaking. I would put Fausto and Susanna in this last category. They run a small agriturismo just outside San Gimignano.

When it comes to the directories that matter, one towers above the rest. TripAdvisor wields the same power in this market that Google wields in our world of search. It is the ultimate arbitrator of life and death. And the smartest of the operators have taken this to heart. They “get” social media at a level that is humbling to this particular North American online marketing “expert.” It’s not just asking for a “like” or a good review. They know that the best way to get a glowing review is to utterly, undeniably, completely deserve it.  There’s no faint praise here; you have to blow your customer’s socks off.

It’s this intimate, person-to-person exchange that makes this the most efficient market possible. No money or marketing efforts are wasted on inefficient channels.  There are no middlemen. It all takes place directly between the host and the guest. It’s completely genuine. How many marketing campaigns can you say that about? They give you the experience of a lifetime, and you say a heartfelt thank you. TripAdvisor (and Facebook, and Yelp, etc.) is just there to make sure the world hears about it.

If Fausto and Susanna have understood the power of social media, Marina Pasquino is teaching a master’s class in it. In all my years of staying in hotels and consulting to businesses, I’m not sure I’ve ever seen a better-run business than Signora Pasquino’s small hotel on the Adriatic coast. My jaw dropped during check-in, and didn’t manage to snap back into place until we left seven awestruck days later.

The Hotel Belvedere, a tiny hotel in Riccione with less than 50 rooms, has blown TripAdvisor’s review algorithm to smithereens. It doesn’t just top the ratings for hotels in its area – it’s TripAdvisor’s number-one hotel in all of Italy, and one of the top 25 hotels in the world! Of the over 800 reviews it’s collected, 97% of them are effusive over-the-top odes to the hotel, its staff and the complete Belvedere experience.  The feedback is so overwhelming positive, posts sometimes get flagged for manual review to ensure they’re not fraudulent. They’re not, by the way. I mean, how many hotel staff actually hug you when you check in? Seriously.

Business is almost completely generated by word of mouth (both traditionally and digitally). Guests come back every single year. And they bring their friends. During our week, several groups (many from Canada, where I’m from) were at the hotel. And all this is fueled by a warm contact through social media after you leave. With the Belvedere, when you talk about friending and liking, you don’t have to put quotes around the words. In this case, those labels match your intention.

I’ve talked before about how rugged adaptive environments drive the evolution of new breeds of marketers. I can’t think of any environment more rugged than the tourism industry in today’s Italy. And here, the Faustos, the Susannas and the Marinas are showing that if you work your ass off to be amazing, we’ll return the favor by letting people know. I’m not sure what you would call this particular species, but I hope it prospers. We could certainly use more of them in the world.

What is this “Online” You Speak Of?

First published September 12, 2013 in Mediapost’s Search Insider.

I was in an airport yesterday, and I was eavesdropping. That’s what I do in airports. It’s much more entertaining than watching the monitors. In this particular case, I was listening to a conversation between a well-dressed elderly gentleman, probably in his late ’80s, and what appeared to be his son. They were waiting for pre-boarding. The son was making that awkward small talk — you know, the conversation you have when you don’t really know your parent well enough anymore to be able to talk about what they’re really interested in, but you still feel the need to fill the silence. In this case, the son was talking to his dad about a magazine: “I used to get a copy every time I flew to London,” he said. “But they don’t publish it anymore. It’s all done online.”

The father, who had the look and appearance of a retired university professor, looked at his son quizzically for a few minutes. It’s as if the son had suddenly switched from English to Swahili midstream in his conversation.

“What’s ‘online’?”

“Online — on the Internet. It’s published electronically. There’s no print version anymore?”

The father grappled with the impact of this statement, then shook his head slowly and sadly. “That’s very sad. I suppose the mail service’s days are numbered too.”

The son replied, “Oh yes, I’m sure. No one mails things anymore.”

“But what will I do? I still buy things from catalogs.” It was as if the entire weight of the last two-and-a-half decades had suddenly settled on the frail gentleman’s shoulders.

At first, I couldn’t believe that anyone still alive didn’t know what “online” was. Isn’t that pretty much equivalent to oxygen or gravity now? Hasn’t it reached the point of ubiquity at which we all just take it for granted, no longer needing to think about it?

But then, because in the big countdown of life, I’m also on the downhill slope, closer to the end than to the beginning, I started thinking about how wrenching technological change has become. If you don’t keep up, the world you know is swept away, to be replaced with a world where your mail carrier’s days are numbered, the catalogs you depend on are within a few years of disappearing, and everything seems to be headed for the mysterious destination known as “online.”

As luck would have it, my seat on the airplane was close enough to this gentleman’s that I was able to continue my eavesdropping (if you see me at an airport, I advise you to move well out of earshot). You might have thought, as I first did, that he was in danger of losing his marbles. I assure you, nothing could be further from the truth. For over four hours, he carried on intelligent, informed conversations on multiple topics, made some amazing sketches in pencil, and generally showed every sign of being the man I hope to be when I’m approaching 90. This was not a man who had lost touch with reality; this was a man who is continually surprised (and, I would assume, somewhat frustrated) to find that reality seems to be a moving target.

We, the innovatively smug, may currently feel secure in our own technophilia, but our ability to keep up with the times may slip a little in the coming years. It’s human to feel secure with the world we grew up and functioned in. Our evolutionary environment was substantially more stable than the one we know today. As we step back from the hectic pace, don’t be surprised if we lose a little ground. Someday, when our children speak to us of the realities of their world, don’t be surprised if some of the terms they use sound a little foreign to our ears.

Beware Confirmation Bias

First published September 5, 2013 in Mediapost’s Search Insider

Most testing of marketing is disproportionately biased towards the positive. We test to find winners. But in the process, we often cut losers off without a second glance. And this can be dangerously myopic.

I’ve talked in the past about taking a Bayesian approach to strategy. The more I explore this idea, the better I like it. But it comes with some challenges – the biggest being that we’re not Bayesian by nature. In fact, there’s a cognitive bias roughly the size of a good-sized cow barn that often leaves us blind to the true state of affairs. In psychological circles, it’s called Confirmation Bias, and in a comprehensive academic review in 1998, Raymond Nickerson stated its potential negative impact, “If one were to attempt to identify a single problematic aspect of human reasoning that deserves attention above all others, the confirmation bias would have to be among the candidates for consideration.”

Here’s the thing. We love to be right. We hate to be wrong. So we will go to extraordinary lengths to make sure that we’re proven correct. And we won’t even know we’re doing it. Our brain, working surreptitiously in the background, doesn’t alert us to how biased we actually are. The many tricks that go along with Confirmation Bias usually play out subconsciously.

If we try to be good little Bayesians, we have to embrace alternative ideas of all shapes and sizes, whether or not they agree with our current view of things. In fact, we should be prepared to rip our current view apart, as it’s in the disproving and rebuilding of hypotheses that the truth is eventually found.

Here’s where things go wrong in most market testing. We usually test to prove our hunches right. We go in with a favored option and try to build a case for it.  We may deny it, but we all do it. That means that the less favored alternatives usually get short shrift. And it’s often in one of these alternatives that the optimal choice may be found. The more that there is at stake in the test, the more susceptible we are to Confirmation Bias.

Here is the rogue’s gallery of typical Confirmation Bias tricks:

Favored Hypothesis Information Seeking and Interpretation – As I said, we tend to seek information that supports our favored hypothesis, and avoid information that would contradict it. In the Bayesian view, this is equivalent to ignoring likelihood ratios.

Preferential Treatment of Evidence Supporting Existing Beliefs – Even if we somehow collect unbiased information, we will tend to focus on the information that supports our favored view. It gets “over-weighted” in analysis.

Looking for Positive Cases – This is the classic trap of testing only for winners and ignoring the losers. Often, the losers can tell us more about the true state of affairs.

The Primacy Effect – We tend to pay more attention to the first information we look at, which can bias analysis of any subsequent information.

Belief Persistence – Even when the evidence mounts that our original hunch is wrong, we can be incredibly inventive in twisting evidentiary frameworks to provide continuing support. Along with this is another bias called the “Sunk Cost Fallacy.”  The more we have invested in our original hunch (i.e. a major multimillion-dollar campaign that was launched based on it) the more tenacious we are in holding on to it.

Going back a few columns to Philip Tetlock’s Hedgehogs and Foxes, he found that Foxes make much better natural Bayesians. They are more open to updating their beliefs. The big takeaway here? Keep an open mind.

Google Glass and the Sixth Dimension of Diffusion

First published August 29, 2013 in Mediapost’s Search Insider

Tech stock analyst and blogger Henry Blodget has declared Google Glass dead on arrival. I’m not going to spend any time talking about whether or not I agree with Mr. Blodget (for the record, I do – Google Glass isn’t an adoptable product as it sits – and I don’t – wearable technology is the next great paradigm shifter) but rather dig into the reason that he feels Google Glasses are stillborn.

They make you look stupid.

The input for Google Glass is your voice, which means you have to walk around saying things like, “Glass, take a video” or “Glass, what is the temperature?” The fact is, to use Google Glass, you either have to accept the fact that you’ll look like a moron or the biggest jerk in the world. Either way, the vast majority of us aren’t ready to step into that particular spotlight.

Last week, I talked about Everett Rogers’ Diffusion of Technology and shared five variables that determine the rate of adoption. There is actually an additional factor that Rogers also mentioned: “the status-conferring aspects of innovations emerged as the sixth dimension predicting rate of adoption.”

If you look at Roger’s Diffusion curve, you’ll find the segmentation of the adoption population is as follows: Innovators (2.5% of the population), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%)  and Laggards (16%).  But there’s another breed that probably hides out somewhere between Innovators and Early Adopters. I call them the PAs (for Pompous Asses). They love gadgets, they love spending way too much for gadgets, and they love being seen in public sporting gadgets that scream “PA.” Previously, they were the ones seen guffawing loudly into Bluetooth headsets while sitting next to you on an airplane, carrying on their conversation long after the flight attendant told them to wrap it up. Today, they’d be the ones wearing Google Glass.

 

This sixth dimension is critical to consider when the balance between the other five is still a little out of whack. Essentially, the first dimension, Relative Advantage, has to overcome the friction of #2, Compatibility, and #3, Complexity (#4, Trialability, and #5, Observability, are more factors of the actual mechanics of diffusion, rather then individual decision criteria). If the advantage of an innovation does not outweigh its complexity or compatibility, it will probably die somewhere on the far left slopes of Rogers’ bell curve. The deciding factor will be the Sixth Dimension.

This is the territory that Google Glass currently finds itself in. While I have no doubt that the advantages of wearable technology (as determined by the user) will eventually far outweigh the corresponding “friction” of adoption, we’re not there yet. And so Google Glass depends on the Sixth Dimension. Does adoption make you look innovative, securely balanced on the leading edge? Or does it make you look like a dork? Does it confer social status or strip it away? After the initial buzz about Glass, social opinion seems to be falling into the second camp.

This brings us to another important factor to consider when trying to cash in on a social adoption wave: timing. Google is falling into the classic Microsoft trap of playing its hand too soon through beta release. New is cool among the early adopter set, which makes timing critical. If you can get strategic distribution and build up required critical mass fast enough, you can lessen the “pariah” factor. It’s one thing to be among a select clique of technological PAs, but you don’t want to be the only idiot in the room. Right now, with only 8,000 pairs distributed, if you’re wearing a pair, you’re probably the one that everyone else is whispering about.

Of course, you might not be able to hear them over the sound of your own voice, as you stand in front of the mirror and ask Google Glass to “take a picture.”

 

The Marketing Classic Few Marketers Have Ever Read

First published August 22, 2013 in Mediapost’s Search Insider

It may be the best book you’ll ever read on marketing, but you won’t find it in the marketing section of Amazon.  They have it variously filed in three different categories: Politics and Social Sciences, Technology and Text Books. The book is Everett Rogers’ “Diffusion of Innovations,” and you should add it to your reading list.

The book is a comprehensive review of how new ideas spread and take hold in our society, and although it was first written in the 60s (it’s currently in its fifthedition), the findings are as fresh and relevant as ever. Its relevance to marketing is immediate and tangible. After all, what else is marketing but promoting the  adoption and diffusion of new things?

Rogers traces almost a century of diffusion research to see how everything from new high-yield corn varieties to birth control were adopted in various cultures. While there are not a lot of examples purely from the consumer marketplace, the generalized observations beg to be applied to marketing campaigns pushing new (and hopefully improved) products.

Consider these five innovation-specific variables that affect how quickly a new idea is adopted:

1)   Relative advantage – How much of a true advantage does the new innovation offer over what is currently being used? Rogers offers an important caveat here: “The receiver’s perceptions of the attributes of an innovation – not the attributes as classified by experts or change agents, affect its rate of adoption.”

2)   Compatibility – How well does the innovation fit into the framework of the customer’s current situation? Is it an incremental innovation, easily added, or a discontinuous innovation, requiring significant pain on the part of the user to adopt?

3)   Complexity – What is the learning curve that comes bundled with the innovation? The steeper the curve, the slower the rate of adoption.

4)   Trialability – Is it possible to try the product firsthand to determine the relative advantage (see #1)?

5)   Observability – Being the herders we are, adoption is sometimes a matter of “monkey see, monkey do.”

These factors may seem fundamental, but every day new “innovative” products are turned loose on the market, there to wither and die, simply because one or several of these check boxes remain unchecked.

Rogers also spend significant time looking at the social dynamics of diffusion and adoption, including the role of early adopters, change agents, influencers, mass communication channels and interpersonal persuasion. I found amazing close correlations to the findings of my own research into buying behaviors in the B2B world.

At the risk of oversimplifying this seminal work, Rogers found that adoption balances at the intersection of risk and reward. Risk stalls adoption, reward drives it forward, and clarity of communicating this risk/reward balance in a relevant way is either the catalyst or the inhibitor that determines how steep the adoption curve is.

This is a textbook, so expect a small investment of effort to wade through the rather academic delivery, but if you persevere (and to be fair, I’ve suffered through much worse in other books) you’ll come away with perhaps the clearest summation of marketplace dynamics ever put in print.

Maybe We Need More Skin in the Game

First published August 15, 2013 in Mediapost’s Search Insider

I think our world, — or, more specifically, our marketplace — is a little too abstract. We — and by we, I mean the marketers, the suppliers to the market — live too far removed from the market itself: the consumers of the supplied goods.

It’s a point touched on by Nassim Nicholas Taleb in his most recent book, “Antifragile.” Marketers and manufacturers, he suggests, don’t have enough skin in the game to keep them honest. They’re too far removed from accountability. There are too many protective buffers between them and the consequences of their actions.

The law is supposed to provide the accountability — but let’s face it, when it comes to enforcing accountability in the marketplace, we’re a long way from the Code of Hammurabi (one of the first legal codes known), where sloppy workmanship enacted a pretty definite penalty: If a builder has built a house for a man, and has not made his work sound, and the house he built has fallen, and caused the death of its owner, that builder shall be put to death.

Or, consider if the actions of the captain of the Exxon Valdez would have been different if he would have been answerable to a law like this: If a man has hired a boat and boatman, and loaded it with corn, wool, oil, or dates, or whatever it be, and the boatman has been careless, and sunk the boat, or lost what is in it, the boatman shall restore the boat which he sank, and whatever he lost that was in it.

The world was a smaller and more intimate place back then. You couldn’t hide behind corporate lawyers, malpractice insurance and legal loopholes. If you screwed up, chances are you’d lose an eye, a hand or even your life. If you built a bridge that collapsed, you might as well have been under the bridge, because your fate would be the same.

Now, I’m not sure we’re ready to return to the brutal simplicity of an “eye for an eye” legal code, but it does bring up a rather thorny issue: If there are little to no consequences for shoddy or unethical work, what keeps us honest? There’s nothing like skin in the game to provide some pretty compelling motivation for ethical business practices. And there’s nothing like a consequence-free pass to encourage fast and loose corporate behavior.

The good news, I suppose, is that technology is once again making the world a little more intimate. McLuhan’s Global Village is coming to pass, and the unethical of the world are increasingly being held accountable for their actions. In fact, the speed at which this is happening is confounding the legal systems of many a nation, as vigilantism and frontier justice are increasingly springing up, unchecked by due process and judicial oversight.

I avoid trying to predict the future, but fairness and accountability are hardwired into us, so I suspect that as technology allows us to identify those responsible in the most egregious cases, we will be moved to demand action. We will force the market to have more skin in the game, as our opinions and beliefs, in aggregate, will define that market.

Reengineering Hiring

First published August 9, 2013 in Mediapost’s Search Insider

In all my years in business, the one thing I found consistently difficult was hiring good people. We spent a lot of time honing our screening skills, but I sometimes suspect we would have been just as far ahead by flipping a coin.

Over time, we found we achieved pretty good success rates with our lower-level hires, but the one area where consistent success eluded me was in our management recruitment. It seemed that the more senior the position, the worse our track record was. We had a few outright disasters.

When it comes down to it, hiring someone is making a prediction. You examine the evidence and try to foresee if that person will perform at an acceptable level in the position you have vacant. And, as I said in my last column, we humans don’t tend to be very good at making predictions. The more there is at stake in the position to be filled, the worse the consequences if our predictions are faulty. In looking at our past management hires, I realize that it wasn’t that our predictive powers were any less effective, it’s just that the pain of being wrong was more acute.

So, it was with some reassurance and more than a dollop of schadenfreude that I learned that Google has had exactly the same problem. That’s right, Google — the same company that has a zillion brilliant engineers working on every problem known to mankind. But those engineers have to come from somewhere, right? Someone has to hire them. And there, ay, there’s the rub!

In a recent interview in the New York Times, Laszlo Bock, senior vice president for people operations at Google, confessed that Google has tweaked, and, in some cases, massively overhauled its recruitment process.  Take, for example, Google’s famous early predilection for college G.P.A.s. According to Bock, based on actual performance, “G.P.A.s are worthless as a criteria for hiring, and test scores are worthless — no correlation at all except for brand-new college grads, where there’s a slight correlation. Google famously used to ask everyone for a transcript and G.P.A.s and test scores, but we don’t anymore, unless you’re just a few years out of school. We found that they don’t predict anything.”

Google has also slowly backed away from its ironclad requirement that every hire have a degree. Bock revealed, “The proportion of people without any college education at Google has increased over time as well. So we have teams where you have 14% of the team made up of people who’ve never gone to college.”

Sometimes, interviewers fall into the trap of over-playing their own cleverness and “expertise.” We spend more time trying to stroke our own ego by staging an impromptu show of power during the interview than in really listening to what the interviewee is saying. Google found that tricks like brainteasers, while they may make the interviewer feel clever, are worthless in screening out duds. The much less flashy but tried-and-true list of standardized behavioral questions (“Give me an example of when you…”) is a far better predictive indicator.

Finally, Bock admits that screening for leadership positions is the most difficult challenge, because leadership is something that defies easy definitions. “We’ve found that leadership is a more ambiguous and amorphous set of characteristics than the work we did on the attributes of good management, which are more of a checklist and actionable.” So you can ask questions, probing for effective leadership, but because leading people tends to fall into the category of ill-defined problems, you often have to do the best job you can in the hiring process, and then track performance religiously. In this case, “slow to hire, quick to fire” is a good principle to follow.

I found Bock’s last words, on the role of Big Data in management decisions, including those involving people’s performance, revealing: “Big Data — when applied to leadership — has tremendous potential to uncover the 10 universal things we should all be doing. But there are also things that are specifically true only about your organization, and the people you have and the unique situation you’re in at that point in time. I think this will be a constraint to how big the data can get because it will always require an element of human insight.”

Marketing in the “Middle”

First published August 1, 2013 in Mediapost’s Search Insider

In case you haven’t heard, email is dead. In fact, it’s died several times. You could call it the cat of digital marketing, working it’s way through its nine lives. And it’s not alone. Search has died more than a few times. Display was DOA over a decade ago, and has resurrected itself, only to suffer several more untimely demises. In fact, for any digital channel you might care to mention, I can probably find an obituary.

For some reason, we love to declare things dead. We like clarity and finality, and there’s nothing like death for getting an unequivocal point across. Death, by its very nature, should be the final word – except that, in these cases, it almost never is. These channels, like Mark Twain, have had “the rumors of their deaths greatly exaggerated.”

It’s yet another example of how we hate ambiguity. We don’t like being in the middle, drifting between two far off anchor points. It feels uncertain and “mushy”. Humans don’t do well with “mushy”. We prefer predictability. We like to know where we stand, which requires knowing what’s under our feet. The middle represents “terra incognito” – undiscovered and unstable. We know, if we stand here, we have to be prepared to be nimble and fleet of foot.

This tendency comes down to an unfortunate human fragility – we like predictable outcomes, but we suck at making predictions. Not just some of us suck at it – we all suck at it. Philip Tetlock conducted a two-decade study looking at the success rate of “experts” in making predictions in a wide variety of subjects, especially politics. The outcome? Experts come out slightly ahead of coin tosses and chimps throwing darts. Tetlock’s long list of blundered predictions is staggering. Expertise does not lead to accuracy in divining the future. Yet, we still cling to this false hope. We crave a universe that unfolds as it should, or, at least, as we expect it to.

The messiness comes from the complexity of real life. There’s just too much “stuff” happening for us to make sense of it with our limited intellectual horsepower. Evolution, in its blind wisdom, has allowed for that by building in some natural defenses against complexity. We refer to them as instincts, emotions and beliefs. The nasty “gotch ya” in this is that the more we accumulate experience and knowledge, the more inflexible those beliefs and instincts become. We tend to adopt “big ideas” or “macro-beliefs” as guiding principles and philosophical anchors, which become the lens through which we see the world. We trade off open mindedness for expertise. Tetlock calls these “hedgehogs”, from Isiah Berlin’s essay. “Foxes”, on the other hand, draw on a wide variety of experiences to shape their views. They, by their nature, tend to live in the middle.  Tetlock found that foxes have much better track records when it comes to prediction. So, if you want to know what might happen, don’t ask an expert, especially one who is regularly seen on TV. Ask a dilettante – who is much more comfortable with “mushy.”

Ironically, Jim Collins, of Good to Great and Built to Last fame, also taps Berlin for the hedgehog and fox analogies, but he believed that “hedgehogs” are what makes great companies great, because they provide a single objective to focus on – the “hedgehog” concept.

So, who’s right – Tetlock or Collins? The answer, as you would expect in a column on this theme, is that they’re both right. The world is neither a place exclusively for foxes nor hedgehogs. The sweet spot is in the middle.

Nowhere is this truer than in marketing – which has to mirror all the irrationality of human behavior. There are no absolutes in marketing; there is just a lot of mushiness in the middle.  We need hedgehogs for the “big ideas” that make great marketing great. But we also need foxes to help us navigate through middle successfully.  In fact, the more time I’ve spent in marketing (trying assiduously to avoid becoming an “expert”) the more I’ve realized that the middle is where all the action is: between quantitative and qualitative, between strategy and big data, between creative branding and direct marketing, between science and art.

And here, in the middle, we hate to call anything “dead,” because you just never know what might happen.

The Problem with Corporate Org-charts

First published July 25, 2013 in Mediapost’s Search Insider

Last week, I talked about the chasm between marketing and sales in most organizations, with the customer left to perish in the middle. One of the responses to that column was that there’s an even bigger divide between marketing and IT (a subject my friend Scott Brinker has written extensively and eloquently about).  The systemic problem that underlies this is that organizational org charts aren’t built in consideration of a customer’s requirements. The structure of the vast majority of companies is decidedly un-customer-centric.

Typically, the dividing lines of a company are decided by competitive profit and loss requirements, arbitrary product categorizations or regional segments. Within these corporate fiefdoms, the hierarchy of management is dictated by corporate traditions that are at least three decades out of date.  They were designed to run a company where economies of scale and sheer mass were the goals. Corporate strategy was aimed at mass producing and distributing as much product as possible to as many markets as possible. The focus was internal, with management’s eyes focused on productivity and profitability. Marketing was largely unidirectional, from the marketer out to the market. There was little in the way of feedback loops.

The typical corporate quadrumvirate is the CEO, CFO, COO and CMO.  All of these traditionally focus their gaze inwards. The “outside-in” perspective is not explicitly outlined in any of these job descriptions. Theoretically, CMOs should be on top of their market, but in practice this view is largely provided through traditional market research, which is usually several degrees removed from the reality of the market.  Even if a truly honest view of a company is captured in a research report, by the time it is digested internally, it’s spun into a form that bears no resemblance to the original.  Alarming findings are ignored or downplayed. Positive findings are exaggerated to bolster reputations and protect pet initiatives.  Corporate BS is in full-flow. Management typically has no idea how an actual customer perceives the business and its products.

Lately, an alphabet soup of new corporate office titles has been trotted out, paying lip service to the idea of customer-centricity: CXO (X=Experience),  CRO (R=Relationship), CIO (I=Innovation), CCO (C=Customer) or CAO (A=Agility). I know of a company that recently appointed a CXO. She was given the title and office, but nothing more. She had no resources, no budget, no mandate and no authority. She was literally stapled on the side of the org chart, with no lines of connection to anyone else, save for a single line running from the CEO down to her.  She soon found out that this was a one-way line. None of her frustrated feedback was taken into consideration.

I suspect the same is true for the majority of these new “designer-labeled” executives. The lesson? You can’t put a Sierra Club bumper sticker on a ’88 Buick, hoping to end up with a Prius.

In response to last week’s column, one reader asked the excellent question, “How do we bridge the gap?” The answer, based on my experience, goes far beyond including it in this quarter’s list of strategic initiatives. This is a foundational problem, and you’re not going to truly fix it without ripping apart the structure of your organization and rebuilding from the ground up, ensuring that the customer’s requirements dictate the reconstruction blueprints.

Let’s face it, that’s just not going to happen in an organization that has several years invested in doing business the same old way. There are handfuls of new companies, however, who “get” the importance of understanding their customers right out of the starting gate. They are re-engineering the org chart away from the traditional practice of simply being “big & profitable” to becoming “intimate and responsive,” knowing that profitability will come from that. They are eschewing typical titles, and all the political baggage that comes with them, in favor of creating new customer-aware roles with real authority.

In the end, I don’t think this is a “problem” that can be “fixed.” It’s one species of corporation, which will eventually be supplanted by another, better adapted to a new market environment.

Marketplace Chasm: The Divide Between Marketing and Sales

First published July 18, 2013 in Mediapost’s Search Insider

Marketing people and salespeople don’t like each other very much. Oh sure, to be politically correct, they will pay lip service to the ideal that they’re all part of one big happy family, working for the common good of the company. But deep down, you know what I say to be true.  Salespeople don’t trust the sneaky and manipulative ways of marketing people. And marketing people think salespeople are a bunch of type A prima donnas. I know –I’ve heard the backstabbing begin when one or the other leave the room. These are two tribes that are uncomfortable sharing the same teepee.

I believe it’s because they don’t think alike. Marketers are long-range operators. They are more comfortable at a distance from their target – sort of like a bomber pilot in WWII. There, they can objectify the campaign, thinking in abstract strategies. They like the 30,000-foot view. Up there, you can see the big picture and plan accordingly. It’s also a lot less messy.

Salespeople like trench warfare. They prefer rolling up their sleeves and battling it out on the front lines, where rulebooks routinely get tossed in favor of whatever works. Ask any office administrator whom the worst culprits are when it comes to filling out forms and filing reports –an accusatory finger will be pointing directly at the sales department door.  The salesperson’s philosophy is that the rules don’t apply to them, as long as they get results.

Look at one common point of confrontation between the two: the lead-gen form. Marketing people want to gain as much information as possible to plug into the prospect database, so they can slice and dice the data to their heart’s content. They’re not completely happy until they can segment and profile based on height, weight, religious affiliation, shoe size, ethnic background, educational level, blood type, current mood, number of relevant sites visited in the past 72 hours, underwear worn, pets owned and brand of toothpaste preferred. All a salesperson wants is a name, some form of contact and a semi-regular pulse. They’ll take it from there.

So, what’s the big deal? Who cares if salespeople and marketers don’t play nice together?  Well, I care. And I say that as a customer. The problem here is that as the sales department and the marketing department have their little turf skirmish, I’m caught in the war zone. All I want is the smoothest possible path to my eventual purchase, on my terms, at my speed. Your job, Ms. Salesperson and Mr. Marketer, is to help me get there. I don’t really care who got blindingly drunk at the last corporate retreat, or who is consistently a pedantic ass at the weekly sales and marketing “huddle.” I just want to buy the best stuff at the best price — period.

What inevitably happens when marketers and salespeople feud is that the path to purchase gets dictated by them, rather than by the customer. Hand-offs from one department to the other can be unnecessarily bumpy, due to internal problems that have nothing to do with the customer. Sometimes, the lack of communication between the two sides requires customers to do all the heavy lifting to keep the sale on track — including supplying information multiple times, constantly explaining their requirements and having to sit through redundant sales pitches.

In the old days where a disconnected, asymmetrical market was the norm, the divide between marketing and sales was less noticeable. We didn’t really start interacting with a vendor until we were in front of a sales rep. Marketing just primed the pump, so to speak. But today, in a more interactive, symmetrical market, we expect a seamless journey from the world of the marketer to the world of the salesperson. We make no distinction between the two. Unfortunately, the same is not true within the walls of the vendor’s organization. As long as these departments continue to feud, the customer will be the ultimate loser.