Peter Fisk is a global thought leader

Hi Peter

Lets start with the global economic crisis. What should marketers do? What is great marketing in tough and uncertain times?

Nothing matters more than staying close to customers in a downturn – understanding what matters to them now, retaining the good ones you already have, and doing more for them.

Staying close to customers (or consumers, depending on your type of business) is simple, but its easy to forget or de-prioritise in a downturn when operational things seem to matter more. Here are 10 imperatives for staying close to customers:

1. Focus on the “best” customers – those who want to work with you (prefer you, recommend you), and are profitable for you to serve.

2. Research their changing priorities – customers priorities change in a downturn, so find out what matters now, what’s essential, what’s not.

3. Develop more relevant propositions – meet their specific needs more clearly, for example by bringing products together to solve problems.

4. Communicate in appropriate ways – downturns are less about “individuality, outdoors and adventure” and more about “family, home and security”

5. Serve them more personally – thereby understanding them better, and doing what matters for each customer individually

6. Build relationships not transactions – don’t push more at them, or just discount your prices (which just throws money away), and creates a yes/no culture

7. Share their pain – do more for them, for example with better payment terms, a lower priced entry point, or by adding an extra product or service

8. Connect them with others – add more value by connecting like-minded customers together – consumers to share a sport or interest, businesses to share ideas and opportunities

9. Keep talking to them – in a downturn its easy to forget customers, at they time they want most support and reassurance – regular newsletters, cheaply distributed by SMS or email.

10. Energise them – its a tough world, confidence is low, the media is full of gloom – give customers little reasons to smile, to be happy, to talk about something positive.

Are the old rules of marketing dead? What are the new rules?

“Old” marketing is not dead but it needs to be applied in new ways, so for example

1. Strategy needs to be driven by the best market opportunities, rather than just trying to sell more

2. Innovation needs to be more than products, innovating service and support, channels and relationships too

3. Communication needs to be more pull than push, engaging customers when and how they want, using media that helps them, physical and virtual

“New” marketing is really about

1. Outside in rather than inside out – thinking like a customer, rather than thinking about products

2. Integration rather than fragmentation – making the combined effect of all sales, service and marketing activities have more impact

3. Driving business rather than waiting for others – being the customer champion, the business innovator, the growth driver

Does a downturn change the rules again?

The financial “crisis” is a major challenge for financial markets, but now also, together with high oil prices, having an effect on all markets. But downturns are really opportunities for marketers. Some of the challenges are

– To keep working, don’t panic, people still want to live, they still have money, its just they make more careful choices

– To focus more than ever on retaining the best customers, working with them, understanding their priorities, doing more for them

– To seize the opportunities of changing markets, of falling competitors, and preparing for the next upturn

– To drive innovation in both markets and companies – changing the value equation, accelerating new ideas to market

What are the characteristics of companies which are successful in marketing?

Companies who champion marketing start everything they do from the “outside in”

a. They define their purpose by what they do and seek to achieve for customers, rather than just what they do and seek to achieve themselves

b. They develop strategy based on the best external opportunities, in markets, rather than just selling more of what they have

c. They make decisions based on a deep understanding of their customers, and then consider how to make money from delivering it

d. They communicate as a dialogue with customers, perhaps through advertising, but also through many other media, and best of all, word of mouth

e. They drive future profits, and therefore their market value, based on making the right choices about customers and markets

f. They sustain and secure these profits, reducing risk (particularly in a downturn) through strong brands and relationships

g. Marketing is much more than advertising, much more than the traditional “4P” of product, price, promotion and place. Marketing is the driving force of business.

What makes a marketing director successful? Which companies have been most successful?

Today’s most successful marketing leaders have through important talents

· Customer champions – they encourage the whole business to think and serve customers better, bringing people together with a passion

· Business Innovators – they are the creative force for change and new ideas across the business, driving innovation into profits

· Growth Drivers – they are the starting point for strategic thinking, where to focus effort, how to be different, what matters most.

This requires strong collaboration, strategic thinking and practical delivery of projects with colleagues across the business, not just n their own department.

Examples of excellent marketing organizations include P&G, GE, Disney, Visa, Google. No one person is the leading marketer in these companies. It’s a team effort, often with a number of marketing directors championing each market segment, and where the CEO is often the lead marketing thinker. People like AJ Lafley, Jeff Immelt and Steve Jobs.

How do different companies around the world address the economic crisis?

This crisis, more than any other, is global. We now live in a truly connected and mutually dependent world. The money we invest or lend from banks comes from a global banking system, connected a lightning speed through satellite and internet, and our aspirations as consumers are fuelled by global fashions and icons with the help of everyone from MTV to Zara.

In the last month I have visited Singapore, London, Santiago and Istanbul. The message is the same, the impact on financial institutions, corporations and consumers is the same all around the world.

However there are some differences by cultural – in Singapore they are more used to crisis, having suffered badly from SARS and the Asian tsunami in recent years; in Turkey they are more used to economic crisis with hyper inflation and devaluation as people spent more than they had; in London it is largely an institutional crisis, which then became a lack of consumer confidence; and in Santiago people still see the world positively but maybe that’s just their optimistic culture.

The key impact therefore is on consumer confidence – there are more optimistic and pessimistic cultures, and some more resilient who are looking for the opportunities, and others more fragile. Overall there is still lots of money around, it’s just not flowing. Overall, even if a company goes into “recession” that just means that it goes back to last year’s outputs and profits, which weren’t too bad were they? The problem comes when banks and media, and therefore consumers, panic.

Companies similarly take a mixed view. Those with high fixed cost bases – like retailers (those that buy lots of stock) or construction companies (who have lots of land) – are most concerned, and often resorting to massive discounting. Others can flex their cost bases (like airlines, who can ground their aircraft, and reduce flights). And some see the opportunities (like online retailers, home entertainment companies).

Many companies try to save cash. What are the consequences, and the alternatives?

Imagine there was a global shortage of food – you could lock down your doors, don’t go out, and save your food, eating less and hoping it will last longer – but eventually it will run out. Or you can change the way you work, and go find new sources of food to sustain you over time. Start fishing, get some chickens, or grow your own vegetables!

Likewise the companies that purely focus on saving cash, on reducing cash are short-sighted and will eventually starve to death, particularly if this is a long downturn.

Businesses need to focus more than ever on sustaining and generating revenue, and ideally by finding new sources of revenue too. Of course they need to be careful with how they spend money, but they need to spend it – in smarter ways.

Sustaining core revenue streams means focusing on your best customers, doing more for your customers so that they keep buying, maybe even buy more from you than from other places, and maintaining their confidence through more relevant propositions and more personal service.

Finding new revenue streams means looking for the growth markets, maybe in different geographies or adjacent sectors, or by being more focused on niche segments. Don’t be restrained by your existing physical or mental borders, and look for ways to innovate in ways consumers want now.

Look at many of the great companies that emerged during the Great Depression of the 1930’s. Companies like Motorola because people wanted to communicate, Tupperware because people wanted an alternative to expensive materials, and Disney because people still wanted to smile.

What will happen next in the global economy?

Nobody knows, but it’s unlikely to get better quickly.

Therefore it means businesses need to adapt to the changed world – and adapt quickly if they are going to survive.

In particularly, companies who grew “fat” in the good times need to fundamentally change their diet, and even their habitat. Luxury brands, non-essential items, or occasional purchases. They need to tune into the changing priorities of consumers, the new competition, change their positioning, change their business models to still make money in a very different market.

And as a result, the world will be different again afterwards.

Just like when the dotcom bubble burst, we didn’t give up on internet-based companies, but the ones that survived, and the next generation were different – they used the power of networks, to connect people not just sell, to offer more value and convenience, not just trivial products, to change the world old companies work too.

In particular, consumers will favour the companies who cared for them in the tough times, and the new market leaders will be those who were prepared to change, to invest, to innovate during the tough times.

Marketing Genius applies the left- and right-brain genius of Einstein and Picasso to the challenges of marketing, brands and innovation. Why have you chosen this approach?

From the vision of Apple to the insight of Zara, the passion of Nike and entrepreneurship of Jet Blue, the community building of My Space and thrill of Agent Provocateur, today’s leading brands think and act differently.

Customer insight and creativity are important, but must be combined with the analytical and commercial rigour that drives strategy, innovation and profitable growth.

The “genius” of business today lies in resolving a number of different paradoxes: the ability to connect outside and inside; markets and business; customers and shareholders; creativity and analysis; promises and reality; today and tomorrow.

Today’s leading business and marketing leaders have much to learn from both Einstein and Picasso, one who started with mathematical rigour then thought creatively, the other who was generally mad, but still embraced the theory of his practice.

“Genius” is about seeing things differently, then having the belief to do different things.

In recent years business has favoured a highly analytical, logical, measured approach. Indeed our obsession with left-brain precision, has perhaps led us to forget our right-brain imagination – to see the bigger picture, to make connections and instinctive judgements.

We need both – wider vision and disciplined focus, radical creativity and rigorous metrics – recognising that creating exceptional value for customers is the only sustainable way of delivering superior returns to shareholders.

This is what the book Marketing Genius is all about, and what my company – the strategic innovation firm, The Foundation – is currently helping leading brands like Marks & Spencer, Volkswagen and O2 to achieve with significant impact on customers and performance.

You have said that too many businesses are obsessed with their inside – how to do what they do better. What is the root cause of this?

Too many businesses are obsessed with their inside – how to do what they do better, reduce their cost base, automate their processes – rather than their outside. This important but limiting preoccupation – plus the blinkers of functional silos and industry conventions – means that businesses often miss what matters most.

Similarly, the obsession with more data, more analysis, more measurement, and more process leaves little space for intuition, creativity and the bigger picture. We look to employ people who are masters of the spreadsheet, rather than for their different skills and experiences. It is a recipe by which companies will converge to sameness, for incrementalism, and ultimately for irrelevance.

Ask Kodak, the market leader in photographic film for many decades, who within a handful of years found that their market had disappeared, swallowed up by alien digital worlds led by the likes of Sony and HP. They had not even been on their radar screen, until it was too late.

What’s the root cause? Blinkered thinking, obsession with the short-term, fear of challenging the status quo, inertia and plane simple laziness.

The best opportunities and biggest challenges are outside not inside. Market change and its implications are often discontinuous, requiring more significant responses. They should be the starting point of any business strategy rather than a consequence. Market-thinking should be at the heart of decision making, and market-thinkers at the heart of business.

Apple watched the market for music fragment and blur into chaos, as new technologies disrupted the industry model and consumers began to rebel, new entrants challenged the economics and old formats quickly became obsolete. Apple brought together an innovative solution in the form of hardware and software – iPod and iTunes – to offer a way through this turmoil, to redefine the industry dynamics, with a compelling and profitable solution

You suggest that in order for companies to enjoy more success they should strive to build dialogue with customers on their terms, in their time and place, rather than product-push, mass-market campaigns. What are some of the ways in which organizations can do this?

An “outside-in” approach to business starts with the market. A market strategy – defining where and how to compete, and what to do for short and long-term commercial success – must sit at the core of a business’ decision-making framework. This requires fundamental choices, about which markets to focus on, and how to be positioned within them – less about legacy and capability, more about opportunity and customers.

An outside-in brand defines what it does for customer, rather than what it does itself. Outside-in innovation starts by redefining context before considering products and services. Outside-in communication is less about blanket campaigns, more about customer-initiated dialogues. Outside-in channels are no longer an extended arm of suppliers, but trusted agents of customers. Outside-in relationships are more based on communities than transactions.

Amazon, for example, uses its intelligence and imagination to anticipate and meet the needs of each customer. Not only did Jeff Bezos and his expeditionary marketers seize the new “whitespace” by leveraging virtual technologies and physical delivery, but they harness customer power, fundamentally doing business on customer terms, and doing it profitably.

In the next 5 years we will see a fundamental shift from conventional “push” advertising that tries to sell every customer the same product in the same way at the same time, to much more ambient “pull” media which build ideas in people’s minds. This background-like positioning establishes the brand ready for when customers want to search and buy, supported by a range of more interactive media through which the customer can choose to connect on their terms.

You have said that most of us in the western world typically have everything that we need so our wants are more emotional and unarticulated. What are the implications of this for today’s marketers?

In a western world of fulfilled needs, marketers need to work smarter to explore what customers would like or love, rather than just what they functionally need. On one side, this is about more sophisticated learning techniques – understanding people’s emotional triggers, observing their actual behaviours, changing their attitudes and perceptions – whilst on the other side it is about having the insight, creativity and boldness to create new solutions.

This is not about that age old accusation thrown at marketing of “selling people what they don’t want” but about understanding how to solve customers problems, or enhance their lives, better.

Big opportunity areas would include:

– Health-driven nutrition, lifestyle support, and well-being.

– Technically converging solutions in communications

– More ethical and environmentally-sourced products

– Reframing offers for the affluent, youthful 55+ babyboomers

– Low cost alternatives, redefining value, for lower income groups

– More effective work practices, virtual, collaborative and flexible

– Stronger, more aesthetic design solutions fusing function and form

And perhaps the biggest of all, tapping into the so-called “bottom of the pyramid” – the enormous growth markets of China, India, Russia and Brazil. Although this too needs insight and imagination, to create solutions that are relevant and responsible, rather than naively seeking to impose Western values and global sameness.

According to one of your articles, customers are “more informed and less tolerant. Gone is the day when we fit into a well-defined segment, or adhere to average market research statistics.” Given these observations, can there ever be such a thing as customer loyalty?

Yes. Customers are looking for brands (and companies, products and people represented by them) that they can trust and hang onto in a fast changing, confusing and intimidating world.

However this trust must be earned through much more than a database-driven, sales-driving CRM programme. Companies cannot force customers to have relationships with them, and indeed people have become wise to the more crass “points mean prizes” or even “points mean pennies off” initiatives. Look at the early day successes of AirMiles, and the struggle of Nectar; the loyalty to more personalized services like First Direct, rather than big banks like Barclays. The direct marketing campaign that results in an automated phone call telling you that you’ve won a free holiday, has probably destroyed more trust than anything, and is probably the laziest, unprofessional form of marketing.

People build relationships with people like them – customers with customers – who have similar aspirations (so attracted to a similar brand values), and similar practical needs (products and services). We naturally gravitate to people like ourselves. And as society becomes more fragmented, new types of communities emerge, often based around a particular issue and interest (eg new baby, football, downloadable music, politics). Brands can facilitate rather than drive such communities (Huggies, Coca Cola, BBC, Private Eye etc). As such people grow loyal to each other, this loyalty also rubs off on the community-enabling brand too.

Neuroscientists have found that consumers typically choose which brand to buy within 2.6 seconds. If, then, choosing a brand seems such an impulsive affair, can gigantic marketing budgets and intensively planned marketing campaigns really be justified?

The brain is a incredibly complicated device, but we can draw some parallels to the brain sat in the back of our computers. The ROM stores information in the background, which can be tapped into when required and built over time. The RAM is more of a temporary place for information as it is used to support the work in hand.

Brand building – the long-term development of a strong idea, positioned carefully in the market, relevant to certain audiences, and with an increasingly positive reputation – is need to carefully build over time in the consumer’s ROM, their background memory. We do this by ensuring that a brand has a strong sense of purpose aspirationally and functionally, clear differentiation from competitors, and relevance and empathy with its customers.

Driving sales – come the moment in the shopping aisle when the consumer needs to make a choice, we need to ensure that our brand is quickly and foremost accessible from the ROM, to bring it forwards into the consumers foreground, RAM if you will. It is then best positioned to drive emotional preference and physical behaviour. What makes a brand easy to access form background to foreground is its simplicity of message, its strength of empathy, its logical and emotional offer. It also needs to be catchy – which is why we explore the idea of memes, and their particular relevance to proposition design and communication structuring, in the book.

Many people argue that Customer Relationship Management (CRM) is “a waste of time and money as has already been well proven in its very short existence.” How would you react to this?

It depends what you do with it. Installing a CRM system is unlikely to do much for your business, unless it is accompanied by much more.

Amazon uses customer knowledge to learn about customers through every interaction, to personalize offers and communication. Tesco has a very successful database-enabled programme that profiles, understands and anticipates customers needs and wants, British Airways have survived a torrid decade in the airline industry because of the loyalty it has built up with its key business travelers. And the lifetime value of these customers (and indeed their future profit potential) is likely to far outstrip the capital investments required to generate them.

But such initiatives require far more than an IT solution. From a relationship-driving strategy and segmentation to the right propositions and prioritization, more personal experiences and empathy to aligned management and metrics. CRM is a business model, not a software package.

From your research, which companies are your personal favourites for their innovative and memorable approaches to marketing?

Nike – because there is unbelievable passion for sporting excellence in every person at Nike’s World Campus at Beaverton, Oregon. Phil Knight, a passionate athlete turned accountant turned creative marketer is the man who turned a $35 swoosh into a $12 billion business.

Google – because, in a complex world, customers need to start somewhere, and most marketing activities today start with a customer’s Google. Power has fundamentally transferred to customers, with little space in an “outside in” world for traditional campaigns and distributors.

Jones Soda – because, as its founder of the maverick soft-drinks upstart himself admits, “nobody needs or wants my shit … but they love it”. Marketers need to be more radical and bold to stand out from the crowd. Check out their flavours (Turkey and Gravy, anybody?) and labels too.

What is the typical view of customers inside the business?

Most companies are blinkered.

They see the world on their terms – the products they make, the markets they serve, the timeframes in which they operate. They think everybody needs a new washing machine, and have little interest in what people do with it once they buy it. They develop campaigns to persuade everybody to buy one, when the company wants. Channels for the company’s convenience. Price to ensure a profit. Service that is standard for everybody.

They don’t understand the customers’ world.

Customers have bigger viewpoints – they buy products for a purpose, for example because they have a new baby and so need to wash more, or they have a skin allergy to dust, or they just love soft fabrics to cuddle up to. They want it when they move into their home. Not at the shop but fully installed. They care more about what happens when things go wrong, than some fantastic new gadget.

Most companies don’t think like customers, and so their propositions are not focused on what matters, their service is not relevant, and they miss opportunities to do and sell more.

How do you get beyond the numbers – to see the customer as a real person?

This is why the more enlightened customer thinking companies now use “immersion” techniques, spending time with individual customers to understand their broader lives, their needs and wants, but also their dreams and motivations. This is far more insightful than average research statistics which is largely meaningless…

Have you ever met the average person? No. But most companies develop average products, delivered with average service, in an average way, for average people.

No wonder we don’t trust most companies, we don’t love most companies.

There is such a big opportunity for companies to think like customers. Its not just a soft cultural change, it fundamentally changes how you attract, serve and retain customers – and therefore it fundamentally affects revenues, profits and growth too.

What is the shift in relationship between a company and their customers?

Actually, most customers don’t want “relationships” with companies. They’d much prefer to have better relationships with real people like them.

Yet most companies persist in trying to force people to have relationships with big anonymous organisations, which just want to sell them more. CRM and loyalty cards don’t build relationships. Maybe if its a real person in the company, then you can have a relationship, but that’s rare.

Instead, companies should facilitate relationships between like-minded people – who love gardening, who love soccer, who love new business ideas, who want to meet each other. This is why networks, social networks and customer networks are becoming so important to customers and business. But networked businesses work by new rules, so you have to be careful to work with them and for them, and not against them.

At times of change, people rethink how they judge things and what matters. Similarly the winning businesses are those who seek the opportunity to disrupt the conventions, to innovate to meet changing needs, and to make new ideas happen – to serve and retain customers now, but also to survive in the upturn, when it eventually comes. Because it will.

The question is are you prepared to rethink your business now. And as a result, will you be a winner or loser. One thing is for certain, the winners will be those who stay closest to customers.

If you were asked, what three key pieces of advice would you offer the marketing managers reading this interview?

Marketers are the people who can most naturally achieve this new balance – to connect customers and business, to embrace creativity and analysis, to see the future and act on it today. They have the natural “outside in” perspective and talents to lead the business.

Marketers should be the most important, influential and inspiring professionals within the business today. Yet for too long, their capabilities have remained organisationally isolated, focused on tactical, functional deliverables, making a marginal contribution rather than the engine of growth and value creation. Businesses cannot survive in today’s markets like this.

Businesses need marketers and marketing more than ever, to step up to the challenges of market complexity and intense competition, to be the creative and commercial driving force, and to embrace customers and innovation across the whole organisation. Marketing is the engine of sustainable growth and long-term value creation.

Marketing must drive strategic direction and aligned delivery, both a stronger function and an essential mindset for business. However this requires marketers willing to change, to step up to the challenge. There has never been a more exciting time for marketing, or to be a marketer.

It’s time for marketing to take centre stage.

Finally, what interests you outside of your professional life, and why?

What hopefully comes across in the book, and this interview, is my great passion for marketing. Both in terms of the activity and how its practices can contribute enormous value to customers and business – but also for marketers – professionals who I believe have the most to offer companies today. But that requires marketers to have the confidence to stretch themselves, challenge their conventions, take more risks personally and organizationally, and work in new ways.

That’s why I took on the role of CEO of the Chartered Institute of Marketing, recognizing the importance of reframing marketing’s capabilities, perception and performance for the 21 Century business, and why its professional development and representative organisations need to step up to this challenge. It’s why I wrote the book, and what I spend my talking about with companies and conferences around the world.

Outside of work, my great passion is for athletics – who is the highest, fastest, strongest?- and myself have run track to marathon since the age of 10 years old. Indeed once you first experience the feeling of winning – like I did in a early school 1500m race, its hard to let go of the search for it. I’m also a great supporter of Newcastle United, the best football club in the world. But most important is my family – my wife and two young daughters give me the energy and inspiration to do so much more, and keep my feet on the ground!

And I’m currently researching and writing my next book – about growth through innovation. In particular it will focus on how to embrace the untapped opportunity of technology-enabled networks, social responsibility in the form of ethics and environment, and the new forms of starting points and signposting which customers seek in a complex, changing world. So if you have a great insight or case study, let me know by emailing peterfisk@peterfisk.com

The best opportunities for business are outside
not inside, meaning that business needs
marketing more than ever, but not as before.

How can you apply the genius of Einstein a
nd Picasso to your business, or develop the
iPods and waffle soles of your genre?

How do you “apply intelligence in a creative way”
to your strategies and brands, marketing and
innovation, communications and experiences?

Here are 10 challenges which demonstrate the
potential of genius in your business today

1. The Strategy Challenge.

Shape the future, whilst delivering today. Market and product innovation drive future revenue streams, whilst brands and relationships make them more certain.

Define the market context, where and how it is to compete amidst blurred boundaries, evolving regulators, and unpredictable change. Market strategy is the starting point.

Choose where to focus effort amidst the bewildering array of opportunities, as markets and segments fragment, technologies evolve, and ideas proliferate.

Articulate your competitive difference in a compelling brand proposition, the big idea that cuts through all the noise and imitation, convergence and commoditisation.

Make better decisions. Few companies have clear business criteria on which to make the right decisions strategically or tactically.

2. The Brand Challenge.

Harness your brand in all its manifestations to build awareness and reach, trust and affinity. There are lots of names and logos, but few truly great brands emerging today.

Engage human emotions. Share a passion that matters to your audience, help them define themselves, but recognise you cant be everything to everyone.

Be authentic and transparent. Whatever you say, you must do. In today’s transparent world, words and actions are closely watched for consistency and delivery.

Bring coherence and support to brand architectures. Corporate and operational brands, product and ingredient brands must work better together.

Actively manage your market, brand, and product portfolios, finding and nurturing the value creators, eliminating the value destroyers, not annually but every day.

3. The Customer Challenge

See your world from where customers stand. Power has shifted from company to customer, from surplus supply to surplus demand. Do business on their terms.

Target with precision. Customers are more different and individual than ever. Segmentation is complex, needs and behaviours change, targeting is hard.

Work out what kind of relationships you really want. Satisfaction is expected. Loyalty is rare. Customers are promiscuous. Few really want a relationship with you.

Tap into passion networks. Consumers don’t care about products, they care about themselves – babies, sports, work – helping to build new communities.

Make privacy a positive. Communication overload has created of backlash in use of personal information. Permission is the start to a dialogue a customer actually wants.

4. The Communications Challenge

Communicate on customer terms. Campaigns are done by companies promoting what they want when they want. Customers don’t buy them anymore.

Capture disparate customer bases. Broadcast media proliferation has driven audience fragmentation. Customisable and interactive. Complex and expensive.

Sell the benefits clearly. Clear and compelling value propositions must be about customers not you. Targeted and tailored, rather than generic to everyone.

Apply impartial logic to creativity. Marketers are still obsessed with ads. It’s a brave person not to do them. Be more open minded about which media, and what leads.

Find new ways to work with creative agencies. Agencies should work together serving clients, compensated for quality of ideas, more than their implementation.

5. The Channel Challenge

Innovate your routes to market. Channels were not sexy. Warehouses and transport. Technology changed that, and channels are now ripe for innovation

Differentiate through distribution. Channel models are changing with intermediaries needing to add more value, elaborating the customers’ experience.

Design your own channels. Don’t rely upon others. Multi-channel solutions create customer choice and convenience, even better if they fuse the best bits together.

Innovate the business model. How the business works with others, and makes money, can be significantly innovated for market and financial impact

Embrace new technologies in innovative ways. Digital formats are still emergent, and can do much more to improve efficiency and the customer experience.

How are you doing so far?

6. The Pricing Challenge

Add more value to customers, and charge them more for it. Changing the peer group, the customer context to judge value is one way. Clarify who manages price.

Get into customer heads. The perceived value of benefits relative to competitors is in the buyer’s mind. Improve the benefits, change the competitive context.

Price comparison is easy. Prices can be compared online between suppliers and markets. Price becomes a tactical weapon, although discounting reduces margins.

Avoid discounting gimmicks. Seek to incentivise trial and change behaviour. Yet coupons only appeal to discount seekers, and create expectations for the future.

Rethink the whole idea of loyalty. Loyalty points are fun, but also quite meaningless. Compare a “2 for 1” grocery offer to the 1-2% discount they offer.

7. The Innovation Challenge

Drive innovation in every part of the business, within products but much more too. Innovation is creative problem solving, with commercial results.

Innovate beyond the product launch – innovate the market, the application, the channel and whole customer experience, and continue to do so over the lifecycle.

Don’t use research like a drunk uses a lamppost. Good research stimulates ideas, rather than fuelling prejudice. Everything from anthropology to econometric modelling.

Embrace the power of design in every aspect of business. One of the biggest emotional engagers, yet seen as superficial packaging or an after-thought.

Champion the total customer experience. Products are quickly copied. Experiences are much harder to copy, but also take much more effort to make happen.

8. The Performance Challenge

Engage the city analysts in market thinking. Investors look to the long-term, where cash will come from in future years. Relationships, brands and innovation.

Businesses create long-term value for shareholders through capital growth and dividends. Capital growth depends on investor perceptions, so manage it actively.

Understand where the money is really made. Profits help, particularly if they exceed investor expectations. It is easy to destroy as much economic value as you create.

Don’t rush to delight the customer. Customer satisfaction scores are important, like hygiene, but they are no guarantee of loyalty or profitability.

Find the key measures of success. Lots of data, but few measure the right things. Few connect inputs and outputs, and understand the most important drivers of value.

9. The People Challenge

Get customer and market thinking into the boardroom, and on the dashboard. Execs have a low customer IQ. Strategy and decision-making needs “outside in” thinking.

Approach markets horizontally not vertically. Sales, marketing and customer service, and every other part of the business, all deliver the customer experience.

Make market thinking strategic and commercial. Make customer value the only route to shareholder value, and drive prioritised actions that create both sustainably.

Market-thinking managers need the leadership skills to drive strategy, the innovation skills to catalyse the future, and the commercial skills to prove it works.

Businesses need creative leadership. Management is about making the right decisions, leadership is about inspiring action. Both matter, not easy to be both.

10. The Implementation Challenge

Leapfrog your way to market. Connect your brand with another already loved by a target audience, fuse the values and value of both through affinity programmes.

Learn to influence customers with permission and without intrusion. Create the background presence – to build awareness and shape preferences. Reputation is key.

Help customers make sense of the world. With limited time, consumers don’t want to be experts, or to work hard, they want advice, support on what is best for them.

Be a guerrilla. Usurp the conventions. Surprise challenge your competitors, such as ambushing the sponsorship of an event, can have big impact at little cost.

Use networks. Be it word of mouth, or email to friends, virality is still the best form of marketing around. Networks have infinite value, and grow exponentially.

Are you ready to make it happen?

Marketing Genius explores the attributes of genius, and how the intelligence of Einstein, the creativity of Picasso and success of Buffett can be applied to the marketing challenges of today.

The intelligence of a marketing genius

Albert Einstein was a genius, redefining the laws of physics not through his rigorous mathematical derivations, which only resulted in many pages of complex algebra, but through hypothesis and creativity that imagined “what if” and then used his numeric skills to prove that E=mc2.

Genius Profile : Steve Jobs

Steve Jobs has redefined the marketing of technology, from the early days of Apple’s Macintosh to Pixar blockbusters like Toy Story, and back to defining our iLife at Apple. He is a market revolutionary, intelligently making sense of markets, and applying technologies to customer needs.

He grew up in the apricot orchards that later became known as Silicon Valley, at a time when technological innovation and psychedelic music were competing local influences. He studied physics and literature but dropped to found Apple Computer with his friend Steve Wozniak in 1976, based in his parent’s garage and financed by the sale of his VW campervan. By the age of 23 he was worth over $1m, over £10m by 24, $100m by 25, and now a fully-fledged billionaire.

He grew the business by focusing on niche markets, charging a premium for for his novel products. However 1985 saw him lose out in a power struggle with John Sculley as Apple began to struggle with the might of Microsoft. This led him to Pixar animation studios, which has since created five of the most successful and loved animated films since the early days of Walt Disney. From Monsters Inc. to Finding Nemo they have earned more than $2 billion at the box offices.

Back at Apple Computer, with Steve Jobs reinstalled as leader, Apple recognised that the computing world had changed. In the same way that Pixar had transformed movies, the likes of Dell had disrupted the computing world. But Jobs saw the future differently. He re-engaged his passion for well designed computers, this time with open systems, funky coloured iMacs. More significantly, he recognised that the music industry was in desparate need of innovation. The iPod was born to a new generation of devices, and iTunes closely followed.

Jobs is currently on a high – sales of the iPod reached 10 million just before Christmas, profits at Apple have increased five-fold, and at Pixar, The Incredibles were packing out cinemas around the world. His annual performance at MacWorld a few weeks ago was watched by millions, this time hearing about plans for the new low-priced iPod Shuffle, designed to consolidate his market leadership.

Jobs takes a deeply personal approach to business – a visionary and strategist, and a hands-on approach to the detail of customer needs and product design. He is a marketer and leader who inspires superlatives. His staff describe him as a “reality distortion field”.

The creativity of a marketing genius

Pablo Picasso was a genius, challenging the impressionist conventions of his time. Having patiently absorbed the work of Manet and Toulouse-Lautrec, he combined his Spanish passion and visual talents to define the new art form of Cubism, and become a rare legend in his own lifetime.

Genius Profile : Philippe Starck

Philippe Stark is the grand fromage of design. From architecture to furniture, utensils to fashion, Starck is currently putting his mark on around 100 products every year. His early work was more akin to fashion and novelty, whilst the turn of the century marked a move to design which has its core in honesty and integrity – from throw-away artefacts to pieces of timeless value.

“Everyone should be pondering, asking themselves questions about life, money, desire, war, themselves” he believes.

His early days were spent underneath his father’s drawing boards, playing with paper and glue, taking anything to pieces and rebuilding it, usually in a different way. Remaking the world around him. Clocks, vases, door handles, toothbrushes, watches, food, cutlery lamps, lemon squeezers, desks, motorcycles, taps, baths, toilets. You can wake upto to his alarm clock, where his space-age boots, carry his Samsonite luggage, use his discount-price Target accessories, dine at Asia de Cuba restaurant, and sleep in his new classic hotel, The Paramount.

Starck champions creativity with purpose, art that is practical, insight that is innovative. His collaborations turn average products into practical and essential objects of desire, and .can easily triple the profit margins of the brands he works with.

At his drawing board he works with purpose and passion. He touches us through his striking work, and because he thinks without boundary, rejecting the conventions and challenges of our tolerance, creating objects that are good and beautiful. Later this year he launches the Starck Mouse with Microsoft – with fur and tail, it looks like it will squeek rather than click.

The success of a marketing genius

Warren Buffett is a genius, the offbeat investor who lives in the same £31,000 house he bought in his twenties. Yet his $36 billion personal fortune, including a third share in Coca Cola, has been achieved by looking for undervalued companies with unfulfilled potential in growth markets.

Genius Profile : Phil Knight

Phil Knight markets with a passion. He turned his own athletic frustrations to business, and with an accounting degree he created Nike as a company passionate about sports and profits. For over 30 years he has pushed the boundaries in sporting performance and business results. At the end of 2004 he hung up his CEO shoes, although he remains chairman, handing over a $12 billion company he built by hand.

Knight’s first love was athletics. Whilst studying business administration at the University of Oregon, he trained hard under the guidance of coach Bill Bowerman. However his success was never great, recording a personal best for the mile of 4 minutes 10 seconds.

Frustrated by his lack of sporting success, he sought anything to make a difference, not least his shoes. He scoured the world, and on a trip to Kobe in Japan he discovered Tiger shoes, the forerunner of Asics. He started importing them, selling them at track meets from the back of his van, having now graduated, and started training as an accountant. In 1972 he decided to go a step further. He paid a friend $35 to design a swoosh logo, stuck it on his first shoe, “The Cortez”, and Nike was born.

By 1979 he had gained 50% of the US running shoe market, at a time when the jogging boom was taking off. He and Bowerman constantly innovated with waffle soles and air cushioning. Through the next two decades, largely through highly creative marketing – the advertising, the endorsements, the “just do it” cult – he turned Nike into the global brand leader, in every sport, in every land. Nike’s portfolio now extends to Converse sneakers, Hurley surfwear, and Cole Haan formalwear.

Phil Knight is an intuitive marketer, but also a disciplined accountant. He has been portrayed as mysterious, inscrutable, eccentric, unpredictable, enigmatic, idiosyncratic, shy, aloof, reclusive, competitive and a genius. He shuns publicity although is never far from his desk – or the gym – at Nike Campus. However his passion continues in his products and his people, as well as making Nike one of the most profitable and respected companies in the world.

“Genius” is the one attribute on the list that Knight himself questions. “Other than that, I’m all of those things, at least some of the time”. However surely a genius is far too intelligent to call himself such a thing.

More genius marketers …

Marketing Genius is stretching in its challenge to marketers, but also highly practical in how they can apply their marketing in more intelligent and creative ways. A number of tools are essential and new. Here is just a sample:

New tools for more intelligent marketing

1. Market Mapping – identifying the macro-market landscape, the hot spots and cool places, the black holes and whitespaces. (For an example of applying this tool to Apple and its adjacent markets, see Genius Markets).

2. Market Strategy – defining where and how to compete, which existing and new markets to focus on, and how to be different. (This puts marketers at the heart of business strategy, and is different from the more conventional marketing strategy).

3. Brand Genes – identifying the unique culture and differences that your business possesses, assembling them in relevant ways for each audience. (See Genius Brandsfor examples of how companies have combined genius to form disctinctive capabilities).

New tools for more creative marketing

1. Reverse Marketing – doing business on customer terms – rethinking channels and communications, products and pricing where, how and when they want.(See Brand Concept for examples of applying this to Customer Power).

2. Memic Messaging – finding the memory patterns that lodge your brands in consumer brains for longer, with faster retrieval and more influence. (Imagine the most catchy pop song and how you can build memetics into your communication platforms).

3. Concept Innovation – moving beyond product development, to redefine the purpose of your brand, and the applications of your products. (Think about GE from engineering to information, or BT offering call centre outsourcing).

New tools for more successful marketing

1. Customer Capital – articulating the real value created by marketing, the future cashflows generated by current and future customers. For more information on how to value your marketing impact download PDF about Customer Capital.

2. Business Reporting – making brands and marketing the first item on the investors’ mind, the annual report and therefore the boardroom agenda.(The new OFR requirments for UK annual reports began on 1 April 2005, with new opportunities for marketing reporting. (See more about Customer Capital)

3. Brand Leadership – recognising that leadership is not management, that leaders inspire followers, creating the vision and confidence to succeed. We also evaluate how marketers make the best CEOs (21% of FTSE CEOs are marketers, and their companies on average deliver 5.9% superior returns to sharholders).

More genius tools …

From affinity marketing like Capital One to the customer communities of Huggies, from Intel’s ingredient branding to Hotmail’s viral communication, Marketing Genius describes a wide range of conventional and contemporary tools and how to apply them.

Marketing Genius champions brands that have the vision and power to shape their markets in their own destiny rather than others, to maintain their focus and principles over time, and to combine intelligence and creativity in order to drive success competitively and financially. These are some examples.

1. Alessi.

The Italian designers combine design and technology to create objects of household utility and desire. In 1921, Giovanna Alessi first struck his lathe in the Alpine village of Crusinallo, with the belief that no man should be forced to dine from a boring plate. From Anna G, the corkscrew, to radios called Poe, the design family enjoy and celebrate the simplicity of everyday objects, whilst constantly pushing the boundaries of both function and form. They are guided by the creativity of designers such as Philippe Starck and Also Rossi rather than following the whims of the market, and the possibilities of materials, more recently embracing colourful plastics to complement their classic medium of stainless steel. 65% of products are now exported to over 60 countries, helping them to build an intensely loyal customer base, who typically build up their collections over a lifetime.

Brand Genetics : design and technology, boldness and imagination.

2. Enterprise

Enterprise has quietly grown to become the largest car rental company in North America by rejecting the conventional wisdom of focusing on holiday and airport locations. Instead Enterprise and its 57,000 staff, who all share in the business success, have grown up in the inner cities, focusing on short-term and replacement rentals. Their people share an incredible entrepreneurial spirit more associated with a small company, working customer by customer, car by car, to be the best rather than the biggest. Their service culture and market focus enables them to charge a market premium, and to rapidly enter new markets which to the conventional eye, would appear saturated. The company now generates over $7billion from its 600,000 cars and has made many millionaires out of its people on the way. Previous leaders Hertz and Avis now need to try even harder.

Brand Genetics : focus and differentiation, culture and service

3. Google

“Googol” is the mathematical term for a 1 followed by 100 zeros. In 1995 Larry Page and Sergey Brin created in their Stanford University bedroom what within 5 years would be dealing with 100 million internet searches every day, and make them multi-billionaires in less than a decade. Indeed last year’s Nasdaq floatation was not without controversy, when Google claimed they should not be treated like a “normal” company. With over 80 million users, searching through 8 billion webpages, Google is now the world’s leading search engine. They are known entirely through word of mouth, and their revenues are driven by enabling advertisers to target online users in highly sophisticated and efficient ways. They stay true to their “10 things” philosophy, ranging from “focus on the user and all else will follow” and “fast is better than slow”, to “you can be serious without a suit” and “great just isn’t good enough”.

Brand Genetics : technology and vision, simplicity and leadership

4. Ikea

Ingvar Kamprad set out from his Elmtaryd farm in the village of Aggunnaryd – hence the letters forming IKEA – with a mission to “create a better everyday life for the many people”. Since 1943 the company has focused on democratising design by offering a wide range of well-designed, functional home furnishing products at prices so low that as may people as possible will be able to afford them. Their flat-pack approach gives them supply-chain efficiency and speed, even if it infuriates some consumers. Their 200 stores are typically in urban, isolated areas targeting young homeowners, and creating a distinctive experience (not least through their restaurants at the heart of their stores). With global roll-out, and strong loyalty, their success is likely to continue as long as they can convince people to discard the old, and refurnish their lives.

Brand Genetics : product and cost, design and experience.

5. Jet Blue

The revolutionary airline brought style to a price-discounting market, offering spacious leather seats each equipped with 36 channels of live satellite television, whilst most of its competitors crumbled around it. Launched by David Neeleman, Jet Blue now serves 30 carefully-selected US and Caribbean destinations with a fleet of 68 new, environmentally-friendly Airbus A320 aircraft. The airline succeeds competitively and financially by combining innovative, high-quality service with low fares to build a loyal following. Neeleman followed his previous successes with Morris Air, which he sold to Southwest, and Open Skies, a simple yet powerful reservation system sold to Hewlett Packard. In 1999 he secured £130 million capital funding, rejected the thinking that no-fills was the only future, and judged that the time was right to bring “humanity back to air travel”.

Brand Genetics : innovation and timing, pricing and automation.

6. Jones Soda

“Run with the little guy, create some change” urged Peter van Stolk as he launched his Canadian drinks company back in 1996. His drinks were irreverent – turkey and gravy soda was a top seller – and his distribution channels were different – placing his flame-designed coolers in skate shops, tattoo parlours and music stores. Jones enhanced its cool credentials with the endorsement of leading BMX and MTV personalities, and passion to do things different. The company also embraced technology, enabling consumers to mix their own drinks, and most innovatively, to upload their personal photos at myjones.com which then became the labels on the bottles. A nationwide craze ensued as folks searched through stores for the bottle with their picture on it. Jones Soda has created a cult following with consumers, staff and shareholders – a cult that soon intends to hit the UK.

Brand Genetics : alternative and irreverent, personal and personality.

7. Panera Bread

Panera is the bread shop from St Louis that has driven an American obsession for speciality breads, and now has 700 bakery cafes in 25 US states, with the highest level of retail brand loyalty in America. “We are bakers of bread. We are a simple pleasure. We are a life story at dinner. We are a weekly morning ritual. We are the kindest gesture of neighbours”. The bakeries specialise in all natural ingredients to bake the finest breads, show-casing the artisans and craft of bread-making, and becoming the centre of the local community. The story began in 1981 with the Au Bon Pain Co. which acquired a St Louis chain of 20 bakeries in 1993. Since changing its name to Panera in 1999 the shareprice has grown 13-fold, created over $1 billion of shareholder value, and one of Business Week’s “Hot Growth Companies”.

Brand Genetics : quality and range, network and community.

8. Sky

Sky has changed our viewing habits, and our social behaviours too. With more than 17 million viewers in 7 million UK households, Sky now offers an unprecedented choice of movies, news, entertainment and sport. Not only that, but it has also been smart in signing up the content that is most in demand – not least Premiership football – in order to entice terrestrial viewers, and charge a premium for it. Now that it reaches 30% of homes, the focus has moved from land-grab to profitable delivery. Sky+ has brought personal choice and recording in a way that Tivo failed, whilst the licensing of its own channels – such as Sky News and Sky Sports – to cable and digital networks has extended its reach. James Murdoch now has the challenge of sustaining the relentless growth demanded by his father.

Brand Genetics : vision and innovation, content and pricing.

9. Sony

“Sony” is derived from sonus meaning sound and sonny boy by which the Japanese mean a young person with a free spirit. Sony is therefore “a group of young people who have the energy and passion toward unlimited creation”. This could define Sony, and its target customers. Indeed there are few companies that have achieved such success through steady, organic growth with a devotion to technological innovation, and a Zen-like ability to shrug off defeats. Whilst there have been many successes, from the Walkman to the PlayStation, there has been failure too, losing the battle for video and DVD format supremacy. However the focus on sleek, attractive design that wins over customers, often at a 20 to 30% price premium, has served Sony well. As technologies converge, the focus is also about creating solutions rather than products – the Sony experience – and in staying one step ahead of the consumer.Brand Genetics : innovation and design, leadership and passion.

10. Zara

In 1963, Amancio Ortega started out as a small lingerie business, producing low-priced imitations of upmarket fashion. However Ortega thought consumers could regard clothes as a perishable commodity, like food and drinks, rather than something to be stored over years. Ortega pursued his vision of “ready-baked” clothes, to create a global fashion phenomenon, translating the latest ideas from the catwalk, and trends on the street into new ranges faster than anyone else. Zara’s “sense and respond” approach, enables them to occupy the leading edge of the fashion cycle, when demand and prices are highest, and coupled with their highly efficient supply chain, margins are greatest. With over 600 stores in 50 countries, Zara positions its brand differently by market – in Spain it is at the cheaper end of the market, whilst in US and Mexico it competes with luxury stores.

Brand Genetics : insight and design, speed and efficiency.

My first book “Marketing Genius” set out to explore the changing world of business, and in particular how to approach it with a more imaginative as well as intelligent approach.

Reflecting on recent Marketing Genius events which I have delivered around the world, sometimes its the simple messages that stick with people. In particular the numbers. So here are a few reminders:

2 sides of the brain … Business needs to engage both left and right-sides of the brain to make sense and stand out in today’s markets. To be more visionary and focused, creative and analytical, strategic and practical.

2.6 seconds to make decisions … Customers don’t make rational purchase decisions. Brands need to stick in their heads, more emotional and memorable enabled through more memic and personal communication.

3 times increase in competition … Markets have blurred as barriers fall, technologies converge, and customers change their context.This typically generates more competitors, rapid imitation and relentless pressure on margins.

5.4 things kids can do at once … Youth markets require a different approach. They are able to cope with more complexity, driven byh different influences and stimuli, and a different world view of what is right, good and matters most.

5.9% better returns by marketing CEOs … business leaders with a market-related background are more able to seize the best opportunities, champion customers and competitiveness, and deliver superior long-term shareholder returns.

25% of portfolios create value … a minority of customers, products and markets typically create the majority of economic value. Have the confidence to focus on these value creators and eliminate the value destroyers.

50% of marketing is wasted … but which half, asked Lord Leverhulme. The current proportion could be even higher, due to media fragmentation and complexity, yet marketers are obsessed with pushing even harder, and still struggle to measure it

54% of people have banned marketing … the proportion of US households that have registered to block telemarketing at donotcall.com, driving a communication model based around permission and personalisation.

60% of market research is unused … highlighting the limited engagement in and perceived value of conventional research. Business decision-makers need to see the customer perspective more personally, objectively and holistically.

86% of market value is intangible … reflecting the future rather than today’s profits, and driven by the potential impact of market strategy and innovation over future years, and the strength of brands and relationships to ensure and sustain it.