Continued Importance of Marketing “Sustainability” and “Being Green”!

Sustainability in 2010 is becoming more important and continues to rapidly change the business model of today’s organization.

However, most experts appear to agree that the term-sustainability- is terrible weak as its interpretation is extremely broad and non-transparent. Sustainability was first defined in 1987 by a United Nations Commission that characterized sustainable development in this way: "Sustainability is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." One of the recent trends is to define sustainability as the “integration of economic prosperity, environmental health, and social equity.” This balancing of social, economic, and environment responsibilities is also referred to as “green business”. It is not completely accurate but for simplicity “sustainability” and “green business” perspectives have become interchangeable. A clear definition of sustainability is itself a work in progress. Less experienced marketers tend to focus upon sustainability’s relationship to brand enhancement while a wider scope addresses it as an integral part of value creation and the value chain.

An organization that focuses upon being “sustainable” is one that is an environmentally responsible so that its products and services contribute positive environmental impacts. One of the basic assumptions underlying almost any of the definitions of sustainability is that environmental considerations have to be entrenched in organizational decision-making. They need to adopt environmentally sound business principles and translate them into action. This means organizations must go the extra mile to examine the environmental consequences of every aspect of your operations and be included as part of your strategic business or marketing planning. At each phase of a product/ service life cycle, it is vital to identify exactly how you can reduce your company’s footprint and have a positive impact on the environment. The time has come when organizations are held responsible for both their ethical/social and environmental practices through authentic sustainability. The definition of sustainability must represent the core values and culture of your organization. Every organization can establish its own “sustainable” principles based upon a company’s mission, business model and corporate values.

I read a recent survey conducted by McKinsey & Co. that concludes that “the lack of a fully defined and unilaterally agreed upon definition of sustainability is discouraging CEOs from effectively making it a conscious focus at companies.” However, over fifty percent of the approximately two thousand CEOs indicated sustainability is very or extremely important in product/ service development, brand reputation and overall strategic planning. The top priority indicated for sustainability in their organization was related to improving corporate reputation. However, it also showed that twenty percent do not possess an agreed upon definition of sustainability and about twenty-five percent incorporate it into day-to-day business strategy.

There are a number of lists related to organizations that are very good at being “green”. One example is the Global mutual fund Portfolio 21 in Portland, Oregon. It has invested in and searched the world for organizations that demonstrate an explicit commitment to environmental business practices, such as designing ecologically superior products, using renewable energy, developing efficient production methods, and reducing greenhouse gas emissions. Portfolio 21 has reviewed more than 2,000 companies worldwide. It invests over $300 million in 10+ companies across 20 countries. They selected their ‘Top 10 Green Companies have been selected based on their environmental performance. Obviously, all of these organizations have integrated sustainability into their corporate culture and business model. If you go through and research each one, you will find variations as to their definition of sustainability.

Autodesk: Autodesk software products decrease waste and impacts of design processes by reducing paper consumption and encouraging superior design.

East Japan Railway: It has introduced reduced-weight railcars, developed the world's first hybrid prototype train, is installing solar and wind systems at some of its "eco stations" and is reducing the carbon dioxide emissions of the entire transport system.

Henkel: It was the first company to offer a phosphate-free detergent and produces a wide range of bio-based detergents and adhesives, reducing the company's reliance on fossil fuels, as well as potential environmental health hazards. All new products are required to contribute to sustainable development.

Itron: This U.S. energy management company provides services for nearly 8,000 utilities worldwide.

Natura Cosmeticos: A Brazilian cosmetics company focusing on the sustainable use of natural resources and respect for local cultural traditions, Natura establishes partnerships with rural suppliers, indigenous communities and family farm groups.

Potlatch: A U.S.-based integrated forest products company that is emerging as a leader in the domestic sustainable forestry industry. The company recently achieved Forest Stewardship Council (FSC) certification for all its forestlands (approximately 50% of the company's total fiber needs).

Red Electrica: As Spain's leading power transmission company, and is helping to move Spain in becoming the second-largest European wind-power producer.

Sharp: Sharp is the world's largest producer of solar cells and is one of just a few industry leaders to support a solution to e-waste in the United States. Sharp classifies its manufacturing facilities as "super green" or "green."

Umicore: Based in Belgium, Umicore is the world's leading recycler of precious metals. Examples include materials for rechargeable batteries, fuel cells, and auto catalysts.

Vestas: Vestas, a Danish company, develops, manufactures, and markets wind energy products. This company has a clear sustainability strategy based on manufacturing equipment and operating facilities for the renewable energy sector.

Social Networking Benefits

There can be tangible business benefits to embracing the principles of social networking. Sample benefits include the following:

Customer Engagement:

• Customer engagement: more personal, faster and two-way communications
• Target & reach a number of people it would be impossible to reach otherwise geographically
• Research/ test & “warm up” potential relationships before meeting in person
• Shift from one-way to 2-way communications for customer-to-brand and customer-to-customer
• Customize and personalize a customer’s experience
• Empower customers & keep customer mindshare
• Faster resolution to customer problems
• Improve customer service, satisfaction, relations, feedback, retention & referrals
• Opportunity to turn customers into loyal ‘fans’ and WOM ‘representatives’
• Enable organic and bottom-up innovation from consumer
• Introduce one another to people or methods that can help increase profits and improve operations
• Improve targeting for potential customers
• Send instant updates/ messages about new activities
• Increase event attendance

Brand & Image Building:

• Image building- reputation management/ appear more forward-thinking / innovative to customers/ peers.
• Builds credibility and trust in expertise and quality
• Create image of trust, transparency, openness, honest and authenticity
• Stay alert and keep updated on what is being said about your business
• Turn negative perceptions into positives
• Grow brand awareness, recognition, value, loyalty & equity
• Enhance competitive advantage / edge/ position in today's digital economy
• Be the expert resource that everyone looks to for solutions and answers
• Thought leadership and knowledge management contributions-i.e. white papers, slideshows, articles, research
• Innovate faster as SN is an innovations proposition

Networking & Information:

• Networking with customers, peers, clients, contacts, venders, employees, etc.
• Share information, skills, knowledge, ideas and opinions
• Keep up with your peers and clients who already use SN
• Enhance collective thinking and morale with employees and venders
• Ability to meet large numbers of business people without the time and expense
• Word of mouth (WOM) and Viral Marketing improvements-incredibly viral
• Enable employees to network with each other and exchange knowledge
• Stay connected to volunteers and supporters in nonprofits
• Connect people with common interests with your own ‘groups’ and ‘forums’

Sales/ Economic Enhancement:

• Improve sales cycle, velocity, qualification process, conversion rates, closure
• Increase subscribers/ opt-in lists
• Find people or firms that map closely to their USPs (unique selling propositions)
• Test and define differentiation and unique selling proposition
• Highly measurable and defined sales outcome metrics
• Possibly a direct source of revenue
• Cost savings versus higher priced traditional marketing programs and channels
• ROI improvement by cutting marketing, customer service, sales and related support costs

Internet-Based Benefits:

• Allows for great flexibility and easy to change content than other information content in websites, printed materials, etc.
• Build inbound organic links to increase visits to your web site, blogs, images and photos, videos, slide shows, wiki entries, podcasts, and others.
• Expand promotional and announcement activities: new products/ services, live video, giveaways, product announcements, contests and live-updates
• Attach a blog or forum for ‘real’ conversations and feedback
• Enhanced SEO- Rank higher in organic search engines

Recruitment:

• Recruitment of employees
• Recruitment of partners and form joint ventures
• Recruit capital investment
• On-boarding improvements in acquiring, accommodating, assimilating and accelerating new team members

SOCIAL MEDIA STRATEGIC PLANNING….A NECESSITY!

Typical of a lot of marketing, social media strategic plans are usually missing the complete ‘plan’ and ‘strategy’! Because it is so easy and inexpensive to start with social networks, people usually rush to create ‘tactics’ (detailed actions) without any direction (mission/ goals/ objectives), research (environmental scanning) & analysis (SWOT) , Segmentation/ targeting/ positioning. After all of these steps, strategy is finally formulated. Once the social media strategy is in place and providing a broad direction and action, very specific and detailed ‘tactics’ are created. This is suppose to be followed by detailed execution and evaluation phases. Many of the steps in planning are usually skipped over by going directly to creating content at the micro-level, or tactics.

Unfortunately, the concepts of strategic planning and ‘strategy’ are widely misinterpreted, misunderstood and inappropriately applied. For example, most people put the horse before the cart and become impatient to get to the tactical level. They immediately start signing up for social networks or engaging in creating content for social media channels.

It is good to remember that the word ‘strategy’ is derived from the Greek word, ‘strategos’ , which means ‘the art of the general activities’ versus ‘tactic’ from the Greek word, ‘taktike’, that means ‘organizing and using the army in detail’. Most of the development of ‘strategy’ came from military activities thousands of years ago. Strategic planning took strategy formulation, execution and evaluation and created a process that determines an organization’s goals and then identifying the best step-by-step approach for achieving those goals. It can become a highly flexible discipline for making decisions that determine what an organization is, what it does, why it does it and where it is going in the future. Social media activities deserve a well-thought out plan.

The beginning of ‘strategy’ becomes the ‘thinking’ and ‘analysis’ components of strategic planning that provides an overall purpose, direction, intent, vision, mission, goals and measurable objectives. Then based upon all of this foundation and market research/ analysis strategies and tactics are created to satisfy select goals and objectives, reach select targets and provide a step-by-step execution guideline.

A ‘strategy’ does not, however, tell us exactly how to achieve the goal or go in a specific direction. Strategy is usually broad and shapes the eventual tactics and execution. It is more flexible, fluid and interactive while a tactic offers specificity, action, order, steps and can be rather rigid. Therefore, strategy is the culmination of prior decisions and analysis to provide the strategic plan with broad steps, direction and policies for outcome attainment. Hopefully, a successful strategy strives to add value for the targeted stakeholders by consistently satisfying their needs better than any other organization.

Social media has matured to the point where marketers are no longer asking ‘If’ it should be part of the marketing communications mix but ‘How’ and ‘Where’ they should participate. They are moving in 2010-2011 from the trial phase to the strategic execution phase of the strategy learning curve. However, before allocating significant resources in formulating, implementing and evaluating social media campaigns, a well-thought out strategic plan is necessary. This means that organizations cannot immediately jump in and sign up for specific social networks and create content without a plan that has identified and created strong social media strategies.

Social Media Strategic Goals/ Objectives & Alignment!

A strong social media strategic plan must create strategies that are well-aligned and draws a transparent connection between an organization’s business goals / objectives and the processes that are needed to achieve those goals. Organizational/ business strategies at the top lead to marketing and communications strategies at the next lower level. Sub-categories of the marketing strategies are the social media strategies. A well-aligned social media strategy specifically addresses how social media and social networking activities will be applied to achieve its marketing goals/ objectives, and thus, the overall business/ organizational goals. The social media strategies then lead to micro-level social media tactics in communicating with target audiences through blogs, forums, communities, social networks, multi-media sharing, social bookmarks, microblogs, wikis and other marketing channels.

Unfortunately, the social media strategies are not typically fully aligned with the marketing strategies which are not well-aligned with the organization’s strategies. Every level of strategy must be in full alignment with each other and become a strong ‘strategic fit’. Because they are not aligned they often fail and waste considerable time and resources.

Before you can create a social media strategy, you need to identify what are the organization’s overall strategic mission, goals and objectives. For example, typical business goals may relate to:

• Increase economic viability or profitability;
• Cost of operation reduction;.
• Improve communication among stakeholders;
• Expand product/ service innovation.
• 
  

Common marketing goals to achieve the business goals are:

• Recruiting new customers;
• Enhancing customer retention rates;
• Improving customer referral rates;
• Creating a higher level of customer satisfaction.
• 
  

Related to each marketing goal, marketing objectives provide the outcome measurement and time line. For example:

Objective: Recruit 10% new customers by the end of 2011.

Objective: Enhance the current yearly customer retention rate from 50% to 75% by the end of 2011.

Objective: Improve referrals of new customers from 20% currently to 40% by the end of 2011.

Objective: Based upon the yearly customer satisfaction surveys, raise the ‘excellent’ and ‘good’ responses from 35% currently to over 50% by the end of 2011.

Some common goals for social media marketing to help achieve the marketing and business goals / objectives could be:

• Enhance brand awareness and loyalty;
• Build expertise, authority, thought leadership and reputation online;
• Learn more about your target audiences through social networks;
• Educate and inform customers;
• Improve customer service;
• Collect engagement, feedback and communicate directly with customers;
• Enhance online conversion rates;
• Improve search engine rankings;
• Expand visitor traffic to websites and blogs;
• Generate new customer leads.

You will notice that the broad goals are not measurable. You can then create measurable objectives. The eventual social media strategies and tactics will be directed to achieving these social media goals and objectives.

I will discuss more about cost-effective strategic planning in future posts. However, it becomes very important to take the time and build up to the strategy creation through all of the prior steps: Mission, Goals and Objectives, Research, Analysis, and STP. Then all of the business, marketing and social media goals/ objectives must become a synergistic fit through excellent alignment.

Upgrading Your Branding Paradigm in 2010!

There is no universally-accepted perspective, or paradigm, of a particular marketing discipline at any given time.

However, one of the newer branding paradigms in 2010 is directed to satisfying a scenario that consumers evidently want to “experience” and “interact” with the brand digitally or in-person rather than just reading or hearing about them. In addition, all of the marketing paradigms demand considerable more attention to brand creativity, innovation, measurement and engagement. Some of the key trends for 2010 under this ever-changing brand paradigm include:

(1) Re-evaluating the cost-effectiveness of current branding strategies: Is the current branding process working?

(2) Re-focusing branding objectives to creating consumer value: Is your brand a true surrogate for value?

(3) Identifying specific branding attributes (i.e. creative, reliable, trust, performance) that drive consumers to continually buy your products or services : Are the brand drivers creating positive perceived value?

(4) Determining the feasibility of “re-branding” select products or services: Is it the right time to re-vamp and re-do the branding process?

(5) Focusing upon Internet search, social media and networking as viable marketing strategies, channels and marketing mindset: Have you effectively integrated Internet-based strategies into your marketing-mix?

(6) Enhancing the consumer engagement process for real-time interaction and feedback: Have you planned for your consumers being able to interact and communicate about the brands before they even come into contact with the actual product or service?

(7) Establish an up-graded measurement process for all of your branding strategies and tactics: Is the ROI for your branding program satisfying your original financial goals and objectives?

(8) Create a marketing plan that zeroes in on enhancing brand awareness, familiarity, preference and loyalty: Do you know the levels of brand recognition, recall and knowledge your consumers possess that can create strong brand relevancy and loyalty?

(9) Related to #3 and #8 above, the ultimate attribute and driver is still brand differentiation: What differentiates and makes your brands unique in the minds of the consumers that adds to the brand’s value or equity?; and

(10) Creating new interactive informational or sampling sources for your brands: For example, research has demonstrated that over 75% of Internet-connected consumers have searched for a brand; watched a commercial; read an organization’s website or blog; or posted product/ service reviews on social network sites before trying the brand. Other research has reported that over 95% of consumers who were able to have a digital experience with the brand made their final purchase decision based upon this interaction. For example, in an airport lobby recently, I sampled the use of the new search engine, Bing, and a free audio book download through free WiFi that convinced me to at least try them later on.

Are You Ready for Change?

"Change is occurring very rapidly in 2010-2011.” Change can become the key constant impact following this recession. Therefore, being prepared for change is a vital base for strategy formulation.

If the organization is proactive, then agility, change and adaptability become needed strategic traits. Whether it a minor or major change related to your business model, technology, value proposition, management, mergers, affiliations, policies, ownership, strategic direction, marketplace or policies, then change must be carefully planned and executed in 2010-11. Regardless of your logic and driver for change, a thorough change readiness assessment and developing a strategic change management plan. A change readiness assessment answers the question, ‘Where are we today?’ and ‘Can we successfully achieve the change?’ The assessment basically looks at past practices and the current situation. I recently completed an assessment that examined 20 measurable and tailored criteria for a professional services firm. The firm is facing the retirement at the end of the year of three senior “rainmakers” that contribute over 60% of total revenue each year.

Hopefully, these assessments can answer:

• Did your change readiness assessment thoroughly answer how prepared or “ready” your organization is for the desired change?
  
• Did it fully assess how well the key stakeholders understand and are trained to support the forth coming change initiative and its goals?

Based upon the assessment, does your change management plan identify the key change enablers, potential barriers, tactical steps required to ensure success over the long-term, and clearly demonstrate how the change adds to the value chain?, and

If needed, what gaps for a potentially successful change still exist and which key recommended steps are required?

The typical gaps that thorough change management assessment identify are:

• Competing "high priority" change projects
• Limited resources
• Lack of change leadership
• Lack of organizational leadership and support for change
• Level of understanding and buy-in for the reasons for change
• No thorough strategic change plan
• Change Management plan is not tailored to the specific needs of the organization
• Ineffective communications with all stakeholders
• Inadequate controls, accountability and measurement for implementation
• Ineffective potential integration of the ‘old’ with the ‘new’, and
• Insufficient formal training to enhance skills for implementation and support.

Pay Attention to Your “Value Proposition”!

Every organization has a competitive value proposition. Do you know what your organization’s value proposition is?

In 2010-2011, the value proposition has become very important. So, what is a value proposition and why do we bother addressing it?

Definition: The proposition is primarily the underlying reason(s) why your stakeholders desire to do business with your organization rather than with your competition. It describes what your organization offers in terms of tangible benefits and results so that it attracts attention to create a desire to learn more. It is part marketing, operations, strategy and consumer perceptions/ expectations on conscious and subconscious levels.

The proposition must convince a potential stakeholder that one particular product, service or brand will provide better added-value to fill a need or solve a problem than other competitors.

It evokes a powerful emotion that validates and reinforces the stakeholder’s unmet need. It should create a perception and expectation that the unmet need will be completely satisfied. The ideal value proposition is short, precise, customer-focused and appeals to the stakeholders’ strongest decision-making drivers.

It is the sum of all benefit(s) and product, service and brand differentiation with perceived value in the customers' mind. Remember that most purchase decisions are based upon perceived value. Perceived value is the trade-off between the quality of the most desirable benefits and the price paid for those benefits by the consumer.

It becomes embedded into the stakeholder’s mind and represents the full range of market positioning of the brand. Positioning describes market differentiation and makes comparisons. A value proposition is unique that it must also create stakeholder demand, desire and a stimulus for action on an urgent level. The value proposition represents and incorporates the full market positioning into a specific offer for the stakeholder.

If you are going to effectively manage this value proposition, then the first step has to be learning how your targeted customers define value. In other words, what are those quality drivers and surrogates and which ones are the most important?

The second step must define how the stakeholder view the trade-off between quality and price and the level of importance of one over the other?

The third step is to better understand how those targeted stakeholders perceive the value your products, services and brands offer relative to the value to what they can receive from your competitors. It must be remembered that “value” perceptions are comparative assessments and this becomes your value proposition.

Remember that the primary outcome to managing your value proposition is to generate profitable increases in market share and ROI. The value proposition must attract new stakeholders while simultaneously enhancing the retention and loyalty of existing cutomers / clients. Besides these basic outcome objectives, a quality value proposition contributes to enhancing mission and goal creation, targeting, branding, strategies/ tactics, integrated communications and the overall cost-effectiveness of the marketing plan.

Developing a great value proposition requires constant attention and customization to the uniqueness of the organization, its marketplace and stakeholders. For example, the following value proposition for a marketing consulting firm is a good first attempt. It can be improved over time but the positives are that it focuses on the customer, the customer’s objectives and the differentiation attributes are specific and “offer value”.

EXAMPLE:

One of XYZ Consulting’s primary objectives is to exceed expectations, satisfy marketing consulting needs and reach your goals. From innovative and cutting-edge services that accelerate the marketing planning process to cutting-edge technology that provides you with the more cost-effective way to market, we're committed to enhancing your ability to be a market leader and succeed.

The firm’s core competencies are centered on strong leadership, a hands-on approach, extensive experience, excellent customer service and engagement and a dedicated focus on quality and a striving for a positive return-on-investment. These abilities allow the client’s leaders to leverage their time and focus their efforts on strategic and business development activities.

Our clients expand their businesses by a minimum of 25-50% over a two-year period that allows for a well-balanced personal and professional lifestyle.

These outstanding core competencies and results combine to offer outstanding added-value for our clients. Our ultimate goal is to enhance your likelihood of success and lower the risk for potential failure with your strategic marketing endeavors.

Is Strategic Marketing Dead?...No Way!

I hear that question a lot. Because the recession and ‘change’ brought a lot of risk, apprehension and fear of the unknown, we start hearing people talk about how traditional forms of marketing, targeting, strategy, branding, advertising and research are long gone!

I hereby attest to the fact that all of these concepts and tools are not dead. They are actually needed more than ever! However, they require more attention, sophistication, quantification and refinement to take advantage of the external and internal environmental changes that are occurring.

Strategic marketing has been defined by the American Marketing Association as “the activities and processes required to create, communicate, deliver and exchange offerings that provide value for an organization’s customers, clients, partners and society.” The Financial Times in London defines it simply as, “a plan designed to make the future market position of an organization stronger.”

In today’s marketplace, my definition of strategic marketing aims to determine real competitive advantages, measurable added-value and positive return-on-investment. Now the question is: “Aren’t all of these concepts even more important today? I believe they are.

The only key difference is that the more sophisticated marketers “proactively embrace” the financial, marketplace and technology-driven changes. They refine their goal/ objective setting, research and analysis, targeting and strategy formulation. The challenge becomes the reallocation of resources and budgets between a stronger mix of traditional marketing strategies and channels with newer Internet/ social media ones. The wider number of strategic alternatives today demands stronger “strategic thinking” and “smarter choices”. Industry trends and new buzzwords cannot replace thorough strategic thinking.

You will notice that traditional methods are still alive and will remain so. Until we become 100% virtual in our work and social life, then traditional tools and strategies will remain very important. I know of no one who is 100% virtual as most people live most of their lives external to the Internet, Tweeting, Facebook, etc. In some way, most of us still travel, commute, read, watch TV, play, eat, shop in stores and even use phone directories that force us to come into contact with traditional marketing channels. Of course, the Internet, cell phones and other communication tools will continue to expand rapidly. For the foreseeable future, we will need to become wiser, more technologically-savvy and spend a lot more time on customer engagements and relationships. This will demand a strategic marketing paradigm that focuses upon finding the optimal marketing mix of traditional and newer strategies.

For example, it is ironic and has been mentioned a lot in marketing circles that Google did have a traditional advertisement on TV during the Super Bowl for the first time this year while still allocating significant resources to the Internet-related channels. Google must know something about the need to do some traditional advertising as part of their mix.

A well known excellent example of mixing traditional and new marketing strategies was completed by Volkswagen during the Super Bowl. For example, VW created a strategic mix of a traditional TV commercial, an Internet-based microsite for auto selection, a commercial on YouTube, sent a mobile advertisement for cell phones and even used a couple of social networking sites during the Super Bowl. From market research, it appears that VW created its own viral strategic marketing campaign with an excellent strategic mix and results!