Brief. For the Modern Marketer, Hearing (Market) Voices Is a Good Thing
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1 Brief By Jonathan Becher NO. 20 For the Modern Marketer, Hearing (Market) Voices Is a Good Thing CMOs MAKE A STRONG CASE THAT MARKETING SHOULD REPRESENT THE VOICE OF THE CUSTOMER FOR THEIR COMPANIES, BUT THAT DOESN T GO FAR ENOUGH. WE NEED TO REPRESENT THE VOICE OF THE MARKET. SAP Center for Business Insight Brief Q&A Case Study Inquiry E-Book 1
2 Howard Schultz, founder of Starbucks Corp., famously said, Customers don t always know what they want. The decline in coffee-drinking was due to the fact that most of the coffee people bought was stale and they weren t enjoying it. Once they tasted ours and experienced what we call the third place a gathering place between home and work where they were treated with respect they found we were filling a need they didn t know they had. If Schultz had stopped with the voice of the customer, he would have gotten out of the coffee business. Research into the market revealed why customers weren t buying coffee. By recognizing the cause of consumer behavior, Starbucks was able to identify and satisfy an unmet need for great coffee and community. Today, companies must also capture the strategies and viewpoints of everyone who is not a customer: prospects, business partners, competitors, economists, trendsetters, and anyone else who may influence their business or industry. Representing this aggregated voice of the market is one of five key responsibilities that we CMOs must embrace to be successful. Market voices will reveal new trends, uncover needs for products and services that we haven t created yet, and identify opportunities in adjacent markets that we could be capturing. For example, in a global survey of 3,000 business leaders, GE s latest Global Innovation Barometer found that 91% of respondents said understanding customers and anticipating market evolutions are the keys to successful innovation. Said another way, the voice of the customer is still important, but it s no longer enough. REPRESENTING THE AGGREGATED VOICE OF THE MARKET IS ONE OF FIVE KEY RESPONSIBILITIES THAT WE CMOs MUST EMBRACE TO BE SUCCESSFUL. 2 Brief: For the Modern Marketer, Hearing (Market) Voices Is a Good Thing 2013 SAP AG or an SAP affiliate company. All rights reserved. NO. 20
3 So how do we connect the voice of the market with business results? Here are four ways that we ve discovered in our research with CMOs so far: Start in the future and work backwards. Hope Frank, CMO of Conviva, which provides streaming video optimization services to global media companies, is focused on helping define what will happen next with Internet video and the impact on viewers. I m focused on where the streaming industry will be in 2020 and committed to the viewing experience being better, said Frank. By taking this view, Frank s team can build a business case for change. For example, Frank s team found that if today s streaming video experience doesn t improve, media brands stand to lose $20 billion in revenue as viewers shift to new or emerging content experiences and advertisers follow them. With these types of metrics, it s easy for our development teams to have valuable conversations with our clients in regards to the importance of elevating the quality of the viewing experience today, Frank said. Build a dedicated market insights team. At Gap, global CMO Seth Farbman has built a trends and insights team that s charged with helping Gap stay culturally relevant. Giving our designers a sense of how the world is changing and where the culture is going inspires them to create styles that are a little more forward-thinking, said Farbman. If you re always looking backwards in a dynamic industry like ours, pretty quickly you find yourself three or four years behind. Capture behavior, not just data. At financial software developer Intuit, founder Scott Cook started an ethnographic program called Follow Me Home to spend time with customers where they live and work. The goal of the program, which involved all employees, not just marketers, was to gain insights by observing not just how customers used Intuit s products but also how they went about their lives. An early insight involved mobile devices. Our hypothesis was that only power users were doing any types of small-business transactions on smartphones, said Nora Denzel, Intuit s former senior vice president of marketing (she left in September 2012). But we found that even the nonpower users were running businesses from mobile devices. Identifying the trend early convinced the leadership team to invest heavily in mobile product development. When you have hundreds of employees spending time with consumers in the field, you get a pulse that you wouldn t get by just doing primary or secondary research, said Denzel. That was our secret sauce. Look for early signals of change. Several years ago, SAP s analytics products were called business user solutions. (Personally, I never liked that term because I don t know what a business user is. But for two years, the name stuck.) Then we stumbled onto something interesting. By analyzing the search terms that were sending traffic to the analytics section of our Web site, we found that the phrase business user wasn t even in the top 500. The top phrase people were using was business intelligence. But we also noticed that business intelligence was trending down; the numbers were dropping almost every week. In hockey terms, that s where the puck had already been, not where it was going. Another search term was rising in popularity, however: analytics. So we changed the name of the product line to analytics solutions. The market helped us determine the name that would drive more awareness and ultimately more sales. NO SAP AG or an SAP affiliate company. All rights reserved. Brief: For the Modern Marketer, Hearing (Market) Voices Is a Good Thing 3
4 These practices show how having a more complete understanding of the market can give CMOs the ability to prevent their businesses from getting blindsided. Jonathan Becher is the chief marketing officer of SAP. Marketing must become the cultural catalyst that uses market insight to keep the organization from getting stuck in the success of the present and prepares it for the next big shift. It sounds hard, but all we really have to do is become better listeners. There s more. WE WILL BE RESEARCHING AND WRITING MORE ABOUT MARKETING S NEW LEADERSHIP ROLE IN THE ORGANIZATION THROUGHOUT THE YEAR. The SAP Center for Business Insight discovers and develops new research- based thinking to address the challenges of business and technology executives. 4 Brief: For the Modern Marketer, Hearing (Market) Voices Is a Good Thing 2013 SAP AG or an SAP affiliate company. All rights reserved. NO. 20
5 2013 SAP AG or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies ( SAP Group ) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see for additional trademark information and notices. SAP Center for Business Insight Brief Q&A Case Study Inquiry E-Book 5
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