Number 50: April 28, 2004

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This week in Katydid:

• Marketing in The Accountable Organization (part one)
• Subscription Information

Marketing in The Accountable Organization (part one)
In my work as a messaging consultant, I've had the good fortune to work with one of the more inspirational entrepreneurs in America: John Marchica. Mr. Marchica founded FWI, a medical information services provider based here in Scottsdale, Arizona. FWI was named twice to Inc Magazine's list of 500 of America's fastest growing companies. He has just published a book titled The Accountable Organization: Reclaiming Integrity, Restoring Trust, which provides an answer to a range of problems in business today. Not only does he address the recent scandals, but also how confusion, foot-dragging, and lack of vision present more danger to American business. Moreover, he walks the reader through nurturing the principles of integrity, trust, and accountability as a foundation for business.

I felt there was a good deal of valuable information for marketers in The Accountable Organization, and Mr. Marchica agreed to let me interview him on the subject for our readers.

KTD: In your book, you state, "By my definition, marketing means figuring out what the customer needs and wants, and then satisfying that need or desire better than anyone else." This fits my view that we should consider marketing in every business interaction. Is it too much to think of the CEO as a chief marketing officer in addition to their other roles?

JM: As I've written in The Accountable Organization, it's true that the CEO must function at a number of levels. One of the most important roles they play is the Dealmaker – the one who must assess opportunities and make the deals happen. The CEO is also the chief strategic officer, the one setting the vision and the overall business strategy of the firm. That should be true, in theory, for businesses large and small.

As CEO, you can't play either of those roles in a vacuum. You have to get out and talk to people – vendors, customers, internal constituents, and others. Who else will take on that role? Who else can better "sell" the business than the CEO?

I'm not talking about cheerleading, or talking-head CEOs who exist to manage analyst expectations. Rather, CEOs must make the deals, set the strategy, and never lose touch with the customer. In that sense, as you put it, they absolutely should consider themselves as the "chief marketing officer." It's not too much to ask. It's their job.

KTD: Actually, that was one of the things I found refreshing in your chapter on leadership. You didn't define one role that the entrepreneur must play; you defined a range of roles. One of the roles I think is critical now is that of Risk Taker. You encourage using the word 'experimentation' rather than change. As far as marketing goes though, I've found few CEOs who do anything but play it safe with marketing. How can we frame that kind of risk taking for marketers?

JM: That's a tough call. In large companies, the marketing machine that pumps out the same old stuff – trimester plan after trimester plan – is a difficult one to break. Most of the marketers I know are afraid to take risks. Why? First, until you reach the highest levels of the organization, many marketers are focused on tactical execution, so risk taking isn't even an option. Second, there is an element of predictability in their promotional strategies and tactics; people are comfortable with what they know. But with that predictability and lower risk comes a lower potential reward.

Finally, and I find this most troubling of all, is the increasing trend toward measuring everything. I'm not saying that you shouldn't measure your results – by all means, do so. Yet we've become seduced by the immediacy of marketing-related information that the Web gives us, which has led many marketers – and upper management – to demand ROI data for everything they do.

In my experience, most marketers are very short-term focused. They don't stay very long in their positions (which means they need results now), and the demands from management for immediate returns on initiatives are strong. When you can only see one quarter in front of you, it's hard to break free and try something new.

What does all of this have to do with risk? Well, for marketers to be comfortable with risk, they have to be willing to let go of the same old tried and true tactics. Now, those same predictable tactics are becoming more expensive to implement, so the good news is that there is some incentive to break from the past. They also have to be willing to stick it out, often, for a longer time. And finally, some of the best marketing programs – those that build long-term brand equity – aren't necessarily easily measurable.

KTD: You quote a Schwab campaign – I don't know if you can call it a slogan because they were criticizing their competition – "Let's put some lipstick on this pig." I know there are marketers out there right now, who are essentially getting some version of this direction now. What advice can you give them?

JM: Schwab's campaign was poking fun at analysts and brokers who dress up companies that aren't worth the recommendation. For marketers, the meaning is clear: if you have a lousy product or service, the best branding, advertising and promotion – even pricing – can't fix that. You first need to make sure that your product meets or exceeds customer expectations, however they define them. People know a pig when they see one. Don't try to make one pretty. Yet most products have something going for them when compared to their competitors, otherwise they won't be around for long.

Your question gets to the heart of what I call Trust-based Marketing. All brands have, at their core, some level of trust built with customers. Trust-based marketers know this and make building trust their top marketing priority. They ensure that their campaigns communicate honestly about the features and benefits of their product. They ensure that their marketing communications are consistent. Their sales and service channels are schooled in relationship building. And they won't sacrifice trust for a short-term gain, even when their brand is under threat.

Consider the Tylenol tampering case taught in business schools today – it's all about Johnson & Johnson's steadfast measures to maintain trust in their valuable brand. The flipside case, Ford/Firestone, shows the long-term damage to trust that can happen without effective, open, honest communications; or when customers sense that you're hiding something. Additionally, the difference in these two cases comes down to accountability. Johnson & Johnson owned up to the problem and took measures to fix it. Ford and Bridgestone/Firestone publicly fought over who was at fault. Not a good thing when people are sliding off the road in their Explorers.

It's not difficult to practice Trust-Based Marketing. It's a simple, common-sense approach to business. Stand behind your products. Take accountability for mistakes and fix customer problems. Be honest about what your product can (or can't) do. Foster relationships with customers and vendors. And make building customer trust your top priority.

We'll conclude this interview next week in part two.

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Kevin Troy Darling

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