by Dave Sutton
Swift, who had won the award for her high school love song You Belong With Me, was, understandably, hurt.
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“I was standing onstage, and I was really excited because I’d just won the award, and then I was really excited because Kanye West was onstage,” she told People magazine. “And then I wasn’t excited anymore after that.”
This crazy interruption completely ruined the moment for Swift and stunned the audience. Nonetheless, songs from Taylor, Kanye and Beyoncé dominated the charts for weeks after the event and the sales for all three artists involved in this incident skyrocketed in the months that followed.
Seth Godin is famous for saying, “Finding new ways, more clever ways to interrupt people doesn’t work.” Is this a case where “interruptive” marketing pays off? Could Godin be wrong? If you continuously find new ways to shock and awe the audience, will it always pay off? Well, maybe in the entertainment industry or in politics (if your name is Donald Trump), but what about for the rest of us?
In the business world today, interruptive marketing may still work sometimes. However, in the long run, the odds are in favor of you losing your market when you trick or trap your audience as opposed to engaging them authentically. It just makes good business sense to market the way your customers want to be marketed to. Marketers must strive to work with their market, not against them. The fact is that interruptive marketing—the continual pushing of brand messaging through traditional marketing methods, such as broadcast advertis- ing, direct mail, display advertising, flashy booths at trade shows, and even sales people at times—is often just noise and nuisance. Your audience will go out of
their way to avoid you.
Hugh MacLeod, the cartoonist who makes his living drawing “cube grenades” for his clients turns it up a notch by asserting, “If you talked to people the way advertising talked to people, they’d punch you in the face.”
These conventional marketing methods have come under increased scrutiny and pressure to generate more consistent returns. Yet, the new reality is that mar- keting should speak to us, not at us. To achieve this requires an intimate knowl- edge of the customer. Only then can a brand stand out from the crowd and give customers a reason to listen, a reason to care and, most importantly, a reason to buy.
Sounds easy enough, doesn’t it? Yet marketers are held to far higher standards today than they were just a few years ago. Every dollar spent on marketing is now being judged in terms of return on investment (ROI). Corporate executives,
investors, shareholders and donors are evaluating marketing investment plans and portfolios in much the same way that other capital investments are made by the firm—demanding that marketing returns exceed the corporate “hurdle rate” for ROI.
This new era of marketing accountability calls for all marketers to design mea- surable go-to-market processes, actively monitor the performance of their mar- keting investments, and aggressively optimize marketing investment portfolios for true value creation, as seen through the eyes and responses of their customers. And in so doing, capture the “top right” position in their industry.
So, what exactly does it mean to be top right?
When industry analysts and strategic consultants model company perfor- mance within an industry, there is invariably a two-by-two matrix that is used to portray where each competitor stacks up in terms of performance. Whether the axes are revenue versus profitability or growth versus market share, it always seems to turn out that the place to be is in the top right corner of that two-by-two matrix.
The next question is how do you get there; how do you make that move to the top right corner of your industry or sector?
The answer: you have to transform the way you think about and execute your marketing.
Traditional marketers and advertisers continually try new and different ways to interrupt us as customers! And that’s just not working anymore. It’s inauthen- tic, ineffective, annoying and a waste of money. So, we’re turning it around and using this book to interrupt marketers and challenge them to change their ways...
to transform marketing and give customers a reason to care, a reason to listen, a reason to engage, a reason to buy, and most importantly, a reason to stay.
Transformational Marketing literally transforms how your customer experi- ences you, understands you, and interacts with you. It is a change in mindset as well as methodology. No longer is the story simply about you and what you offer. Your brand, your products, your services are not really the hero.
The power and impact of your brand, your product, your services and your story comes from making the customer the hero, and you, the marketer, serving as the guide on their buying journey. Throughout the entire customer lifecycle, the intention—actually the requirement is to deliver on the brand promise. Only then will prospects become customers, and customers become brand advocates.
Why? Because Transformational Marketing is not simply about what you do. It is:
• Why you do what you do?
• What it is you do, based on that why?
• How you deliver it to your customers?
• What the impact is on their lives?
It is this impact that gives them a reason to care, a reason to buy, a reason to engage, a reason to stay. Top right companies routinely beat their competition and can even change the rules of the game as they become category leaders and category definers.
Transformational Marketing is how you move top right:
• Top right of your industry in terms of your financial performance
• Top right of setting the benchmark to which others aspire
• Top right of mind share and advocacy, where your customers don’t just buy your products and services, they tell your story for you because your story matters to them
If you have the desire to win in the market, the patience to tolerate a little crazy, the endurance to drive to the top and the tenacity to stay there, then read on—this book is for you!
Congratulations! You’re an ambitious marketer with a brand to build, leads to generate, revenue goals to hit and the ambition to be top right in your industry.
You’ve got a tremendous opportunity ahead of you to transform marketing and win in the markets where you compete, but a few obstacles may crop up along the way. This book is organized into three parts (the 3 S’s) to help you identify, overcome and mitigate the associated risks of Transformational Marketing:
• Part 1: Story: A lack of timely, relevant customer insights to define a truly compelling yet simple story that connects with and engages your target audience
• Part 2: Strategy: An inability to clearly connect that story to your cus- tomers through formats that they consume, in channels that they use, across every touch point and at the right stage in their buying journey
• Part 3: Systems: Inability to align the necessary systems to flawlessly execute the strategy - with the supporting organization, culture, performance mea- sures, data and technology
Avoiding or overcoming these obstacles is incredibly important. Why? Because they represent conditions for success—where you deliver on your prom- ise and customers deliver on theirs in terms of paying for your product or service. We have learned from experience that success among top right companies occurs when they excel in overcoming the three risks by telling a simple Story, creating a clear Strategy and aligning their Systems to execute with ruthless
consistency.
The lens through which to evaluate marketing excellence is: Simplicity, Clarity, and Alignment. Any great brand that you can think of—from Apple to Zappos— has been built on the guiding principles of Simplicity, Clarity and Alignment: One Voice. One Look. One Story.
Simplicity in Story: The heart of Transformational Marketing is the story—a distillation of who you really are, a peeling back of the layers to discover “why” you do what you do and most importantly why that matters to your customer and how you deliver that value to them. This is the key to simplicity i
n your story.
Clarity in Strategy: One would think that having gone through the process of simplifying the complexities of your story, clarity automatically follows. But no, at least not without intentional and deliberate effort and process. Clarity speaks to
the “what” of your story. What is it that you are actually doing, what is the value of your products and services and what impact will you achieve for your customers? You must be clear.
Simplicity and Clarity get you part of the way there, but as most marketers know, everything is a communications vehicle – inside and out. More often than not, if you stopped reading this right now and asked 10 co-workers to tell you the company story, you would get 10 different answers.
Alignment in Systems: Why? All of your marketing, all employee communica- tions, all sales collateral, all enabling technologies, all of your people at every customer touchpoint must be fully aligned to bring your brand to life. As David Packard once said: “Marketing is too important to be left just to the marketing department.” Alignment equates to the “how.” How do your people communicate your story, how do you want your customers to experience your brand and how do you specifically deliver value? This is often where companies and organiza- tions struggle the most.
Alignment sounds easy but is actually quite difficult to achieve, and even more difficult to sustain. It requires ruthless focus and consistency throughout your entire organization, both internally and then externally. Great brands only move to the top right if they are first understood, launched, and lived “inside-out.”
Simply put: you can’t have more than one Story; you can’t have more than one Strategy to deliver that Story; and you need complete and total alignment of your organizational Systems to execute the Strategy. You must be fully aligned.
This is Transformational Marketing, this is how you move to the top right– the right Story, the right Strategy, the right Systems—all measured by looking through the lens of Simplicity, Clarity, and Alignment.
Chapter 1
Why Marketing Must Change
hen Reed Hastings launched Netflix in August 1997, he was quoted as saying at the time that his goal for the business was, “not to provide DVD
rentals through the Internet, but rather to allow for the best home video viewing for its customers.” What an amazingly prescient statement from the founder of what is today the world‘s 10th-largest revenue-producing Internet company. Most people think of Netflix as an industry disrupter—the brand that would ultimately drive Blockbuster and many other retail video rental players out of business.
The Netflix brand story was simple and clear: greater video selection, more convenience than traveling to a video rental outlet and no late fees. Hastings was one of the first to see that the ability to personalize the shopper experience was a unique characteristic of the Internet. Hastings proclaimed that “if you can otherwise do it offline, people won’t pay for it online. If our internet offering was
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going to be better than retail stores, we had to find something stores couldn’t do well.”
So, Netflix developed a recommendation algorithm driven by customer sur- veys and ratings, enabling them to offer the shopper recommendations for videos they might like based on what they had previously rented and enjoyed. This was a benefit that retail competitors like Blockbuster struggled to deliver. In contrast to Netflix, they had fragmented store systems and a general lack of insight into cus- tomer preferences, behaviors and commonalities across segments of the market. Netflix software “learns” more about customers with every transaction and continuously makes relevant offers and refines recommendations based on deeper customer understanding. By transforming video rentals from a bricks and mortar retail experience to an online, personalized home delivery experience, Netflix gave its customers a compelling reason to listen, engage, buy and stay. Literally, Reed Hastings and his marketing team set the bar for a remarkable cus-
tomer experience in the home entertainment industry.
However, the story doesn’t stop there. Fast forward to 2007 and a company named Move Networks introduced a technology and service that once again would shake up the home entertainment industry: HTTP-based adaptive stream- ing. Why would you need to have a DVD delivered to your home overnight when you could have that same movie streamed instantly to your home through you set top cable box? The tables had turned! Now Netflix faced extinction as cable operators like Comcast and Cox Communications were reshaping the home entertainment experience and shifting customer expectations.
By all accounts, Netflix should have gone out of business at this time. How could they possibly compete? The Netflix brand story had been upstaged by a better story of selection, convenience and overall value. And if the company didn’t change, it would cease to exist.
Fortunately for the company, Reed Hastings is a transformative leader, and as such, he always keeps his eye on the future. Introducing video on demand or streaming services for Netflix was not a question of “if ” but “when.” So, rather than roll over and file for bankruptcy, Hastings set out to mobilize his team to transform the business, formulate a new marketing strategy and develop the cor- responding systems to compete, scale and win.
After all, the Netflix brand story had never been about delivery of DVD to
homes. It was about allowing for the best home video viewing for its custom- ers. Over the next 12 months, the marketing team repositioned the brand from “overnight DVD delivery” to “instantaneous streaming video platform”. Hastings and his team responded with an aggressive strategy to beat the cable players at their own game and make Netflix the world leader in streaming entertainment. Meanwhile, the Netflix technology team made sure that the systems were in place to execute the strategy and remain fully aligned on delivering the promise of the brand story. Today, Netflix boasts over 100 million monthly subscribers to their streaming service and they can instantaneously distribute content to any device, anywhere, anytime.
“I take pride in making as few decisions as possible. When you get to real scale, most of my job is just vision.”
—Reed Hastings, Netflix founder and CEO
Thanks to the digital nature of streaming services, Netflix marketers were able to closely monitor viewer behaviors in search of insights. Early on, they noticed that subscribers were routinely binge-watching serial dramas –often consuming eight, ten, even twelve hours of episodes back-to-back. The most popular shows like HBO’s “The Sopranos” were not only winning awards, they were winning the hearts and minds of the Netflix customer. Netflix perceived the content producers as both a threat and an opportunity. If a licensing deal fell apart with a large con- tent producer like Disney, they might lose a chunk of their subscriber base. Given these circumstances, Reed Hastings determined that the best defense would be to go on the offense. By creating their own content, they could connect in a more relevant and sustained way with the subscriber.
As Netflix embarked on transforming itself into a content producer, they tapped into subscriber insights and focused on producing well-written, high-pro- duction value serial dramas like “House of Cards”, “Stranger Things” and “Orange Is the New Black”—binge-worthy programming that would lock their subscribers in to the platform. These tremendously popular original productions are not only winning awards, they have accelerated the transformation of Netflix once again into a powerful, independent media company.
The series of successful transformations at Netflix is largely due to the
leadership of Reed Hastings and the power of their simple, clear and fully aligned brand story. In addition, Netflix built a team of talented people, adept at refor- mulating strategies and quickly realigning systems to execute with ruthless con- sistency. For many brands today, the biggest barrier to success is their capacity to manage change and proactively transform their business—sometimes at the expense of disrupting what is currently a successful business model. Let’s face it: the status quo is more comfortable. You can sli
p into cozy complacency and invest in a series of safe marketing initiatives that deliver “better sameness’.
Consider the perspective of John Antioco, the former CEO at Blockbuster. He probably didn’t think of Netflix as much of a threat when they first launched their DVD home delivery services. In 2004, Antioco oversaw an infrastructure that included over 9,000 store locations. Blockbuster was the “800-lb gorilla”- the category killer. Antioco probably thought that online video rentals represented a tiny, niche market—just focused on those “early adopters” of the Internet.
Transformational leaders like Reed Hastings have a general discomfort with the status quo. They continually challenge their people to “create the company that will put us out of business”—rather than waiting for some competitor to do it for them. They identify opportunities to transform how the customer experiences their brand story... more efficiently, conveniently, personalized, and that is exactly how companies like Netflix disrupt industry structures and avoid being disrupted by other new entrants.
What are the trends that drive brands like NetFlix to change? The Netflix story is a perfect example of why marketing (and marketers) must change. We live and compete in a hyper competitive marketplace driven by an increasingly connected global economy and shaped by super savvy shoppers. These and other mega trends create the need for change in how marketers posi-
