Commentary

Real-Time With Regis McKenna, Part Two

This is part two of a special edition RTBlog. Our guest RTBlogger - Rob Garner - conducted an email interview with Regis McKenna. Known as the father of real-time, McKenna weighs in on real-time marketing in digital, whether or not marketing is now inherently technical, and whether or not companies should be hiring C-level digital officers or marketing technologists. Part one of this interview can been seen here.

Rob Garner:
 In your 1995 paper entitled “Real Time Marketing” for the Harvard Business Review, you discussed how marketing would shift into the realm of IT, which could be interpreted as either marketers becoming more technical, or technicians becoming more marketing savvy. How do you think this prediction has manifested itself in the current state of digital marketing?

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Regis McKenna: I think marketers have become more IT literate. Most of what is called marketing today is really “Marcom.” I don’t mean to cast disparage on those good people in Marcom positions. I've been there myself. But, for marketing to be distinctive, it must become a corporate culture and strategy.

I pointed this out in my 1991 HBR article, “Marketing is Everything.” Such an approach starts at the top. Jeff Bezos, Founder and CEO of Amazon, for example, reflected this approach in his 2013 letter to shareholders:

As regular readers of this letter will know, our energy at Amazon comes from the desire to impress customers rather than the zeal to best competitors. We don’t take a view on which of these approaches is more likely to maximize business success. There are pros and cons to both and many examples of highly successful competitor-focused companies. We do work to pay attention to competitors and be inspired by them, but it is a fact that the customercentric way is at this point a defining element of our culture.” In the same letter he points out: We build automated systems that look for occasions when we’ve provided a customer experience that isn’t up to our standards, and those systems then proactively refund customers. One industry observer recently received an automated email from us that said, “We noticed that you experienced poor video playback while watching the following rental on Amazon Video On Demand: Casablanca. We’re sorry for the inconvenience and have issued you a refund for the following amount: $2.99. We hope to see you again soon.” Surprised by the proactive refund, he ended up writing about the experience: “Amazon ‘noticed that I experienced poor video playback…’ And they decided to give me a refund because of that? Wow…Talk about putting customers first.”

If you look at how marketing has become more and more IT dependent over the years, we see an increasing number of traditional marketing functions being absorbed into software and systems. Distribution is now logistics, forecasting is done by simulations from data gathered from Salesforce.com. Competitive analysis is Business Intelligence Systems, pricing is done by modeling “what if” scenarios. Service is “self-service” and CRM is still a thriving IT activity. There are many, many more examples of IT become so integrated into the marketing process that any enterprise, in any business cannot run an efficient marketing operation without it.

Finally, from my Marketing is Everything” article:

“Today technology is creating greater customer choice, and choice is altering the marketplace. Six principles define the new marketing: marketing is a way of doing business that pervades the entire company; companies must dispel their limiting market-share mentality; programmable technology promises to open up almost limitless choice for customers; a feedback loop is making advertising's one-way communication obsolete; the line between services and products is eroding; and the marriage of marketing and technology is inevitable.”

Garner: Should companies be hiring the “Chief Digital Officer,” or the “Chief Marketing Technologist”? Or is marketing now inherently technical, and labels no longer matter?

McKenna: First, I don’t think titles matter. And, second, I would never want to eliminate the “creative” aspect of marketing. The new digital technology tools demand perhaps even more creativity from marketing people than ever before. The job is more complex and consumers have so many more choices and options. Competition is global, product failures are many and frequent. Product quality or design is not something many marketers are empowered to deal with.

Marketing, as a function in most corporations just doesn’t have the power or status to make the changes inside nor knowledge the budgets required to implement the kind of customer-IT systems seen at Amazon, or Apple for example. Yet, expectations are high for the CMO. Studies I have seen say that the average tenure of a CMO in the top US 100 branded corporation is 18-22 months. I think there has to be a "conceptual" revolution in marketing - what really is marketing? Perhaps the new social media will drive this revolution. Not because it is the current buzz technology, but because so many young marketing people now faced with the task building and sustaining customer relationships (or Brand, if you will) in a real-time theatre where the customers, competitors, suppliers – foreign and domestic, critics and promoters are all on the stage at the same time.

I think that the marketing people have to embrace the CIO and other IT professionals in their organization to deal with this real-time world. IT may not understand marketing but they build and maintain the customer=connecting networks. Work in teams, share tasks, exchange knowledge. I would encourage marketing people to attend IT conferences and visit “best of class” companies that use IT has an efficient market tool. I have been in marketing for 50 years. I was fortunate to spend those years here in Silicon Valley and watch (and sometime participate) in the beginning and evolution of the Information Age. One important lesson I have learned - "to be successful in marketing, follow the technology."

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