Adopt precision marketing or be ousted

March 1, 2004

BY MICHAEL KRAUSS

Chief marketing officers, listen up: Two consultants with deep roots in technology and corporate reengineering are about to rock your world. These consultants work with Fair Isaac Corp., the Minneapolis-based global provider of customer analytics and decision technology. If you see them, be careful.

Their names are Gresh Brebach and Jeff Zabin. Their new book, Precision Marketing, will give your CEO bosses and your CFO colleagues one more reason to hold you accountable for your spending, effectiveness--and waste.

Breback and Zabin say you spend more than “$234 billion on advertising and other forms of marketing promotion.” A little improvement could have a big payback.

“With Precision Marketing,” Zabin says, “you’re creating a whole new level of accountability. You’re able to measure incremental lift. You’re able to track business outcomes. It’s a closed-loop process.”

These technologists suggest you reconsider your skills, your approaches, your organizational structures and your priorities. Brebach and Zabin portend, “The demise of technology-supported marketing and the rise of technology-enabled marketing.” They forecast an end to mass marketing and the rise of a hybrid approach that blends the best of mass marketing with a new more precise approach. In the process they share plenty of examples from such major organizations as Procter & Gamble Co., Kraft Foods Inc., U.K.-based Tesco plc and RBC Royal Bank, Canada’s largest financial services institution.

Before you blow off Precision Marketing, saying, “I’ve heard it all before,” stop by Barnes & Noble and skim Northwestern University professor Phil Kotler’s foreword to the book. “CEOs and CFOs are finally demanding accountability from their marketing organizations,” Kotler writes. “For the first time, the executive boardroom is being dominated by talk of marketing ROI.”

I hear the ad folk muttering, “Yeah, sure,” as they board planes for Los Angeles to make 30-second commercials. 
Dudes, hear this: Brebach is a proven corporate revolutionary. The last time he took aim at a major corporate function, he changed that position foreverwhat does he mean?. He also helped spawn a $12 billion-dollar enterprise, Accenture. This Brebach character is no one to ignore. His co-author, Zabin, is pretty smart as well. (Zabin’s last book The Seven Steps to Nirvana: Strategic Insights into eBusiness Transformation was co-authored with technology and marketing strategist and Northwestern professor Mohan Sawhney).

Turn the clock back to the mid-1980s. Brebach felt information technology directors in Global 2000 companies weren’t cutting the mustard. New technology offered broad potential to serve strategic business needs. Instead of breakthrough results, we got islands of computing. Technology was mostly an accounting and bookkeeping tool, and IT directors weren’t stepping up.

Long before the Internet, or even the PC, Brebach saw technology’s potential to help the entire business; purchasing, manufacturing, distribution, sales, marketing, finance, accounting--the whole enchilada. Company information systems needed to be totally integrated across the enterprise. The potential was there; it seemed obvious. But most corporate technology executives weren’t ready for the change and disruption. They stuck to their old ways.

As head of Arthur Andersen’s U.S. management information consulting division and later as a director of McKinsey & Co., Brebach went from CEO to CEO extolling the efficiencies and benefits of “systems integration.” CIOs who failed to pay heed were often ousted and replaced by their CEOs.

Brebach agrees there’s an analogy CMOs should consider. “In the 1980s the IT function was just a cost center. It was an unmeasured corporate group. You had to get in there and establish performance measures. Marketing is the last corporate function,” Brebach contends, “that is unmeasured.” 

So CMOs, your time is near. Cling to the past if you dare. Or, choose the path of “precision marketing.”

What exactly is precision marketing? Brebach and Zabin liken it to precision military strikes. In this age of customer scarcity and hypercompetition, they say we need to “use a technology-enabled process for managing customer data, analyzing that data and using it to drive more efficient and profitable customer interactions.” 

Kotler spells out the situation: “Many marketing organizations are skilled in only four traditional marketing activities: market research, advertising, sales promotion and sales force.” Marketers fail to gain all the capabilities required to succeed in today’s technology-driven precision marketing environment. Kotler cites “customer relationship management, partner relationship management, database marketing and data mining, integrated marketing communications, and profitability analysis by product, segment, customer and channel,” as areas of weakness.

Brebach and Zabin offer CMOs solutions and examples. They propose mechanisms for capturing data about customers and getting a fuller view of the customer. They reexamine segmentation approaches using today’s technologies and define a concept for drawing up a blueprint of the ideal customer. 

They propose business processes that foster the growth of profitable customer relationships. They delve into methods for integrating customer data so that predictive analytics can be applied. And they show how analytical techniques are at the core of delivering long-term customer relationships that are profitable. 

As Brebach and Zabin are quick to point out, Precision Marketing is a book for “drivers, and not mechanics.” This book won’t teach you everything you need to know to apply precision marketing in every situation, but it will make CMOs and those who aspire to be CMOs aware of their skill gaps and point them in the right direction.

While much that is said inPrecision Marketing could be gleaned or intuited from earlier works, what makes this book compelling is the source. Brebach isn’t merely a big concept guy. He’s a persuasive, hands-on management consultant who gets CEOs to invest in making real change. 

If you’re a CMO, shrug off Precision Marketing if you like, but you just might find yourself invited to the CEO’s office with a smiling Gresh Brebach sitting at the table. If Brebach shows up on your doorstep, remember, you were warned.

Michael Krauss is a partner with Marion Consulting Partners based in Highland Park, Ill., and can be reached at Michael.Krauss@Marionpartners.com or news@ama.org.

 

 ©2004 Marion Consulting Partners