Digital transformation isn’t about technology. It’s about driving growth through digital convergence.
7 min
Summary
Chan Suh, chief digital officer at Prophet, explains how technology has enabled businesses to grow better. However, the businesses that grow best are those that embrace the concept of digital convergence – the approach of orchestrating digital transformation efforts around a singular purpose that has been reimagined for today’s customers and employees. Watch this video to find out what digital convergence looks and – even sounds – like. For more, read this blog post.
In a bonus episode of AdWeek’s podcast, The Business of Marketing, Senior Partners and co-leads of Prophet’s Marketing & Sales practice Mat Zucker and David Novak discuss their latest global research report, “Brand & Demand Marketing: A Love Story,” with host Toby Daniels.
Stream the full podcast recording to learn how the most effective organizations build integrated marketing organizations that balance brand and demand marketing and drive uncommon growth.
Watch this short video to learn how to break down silos and turn your departments into growth engines.
1 min
Summary
Marketing leaders are under intense pressure to make every dollar count, prove returns and drive impact. That pressure is causing tension between brand marketing and demand generation teams that undercuts growth and harms performance.
Download the full report, Brand & Demand Marketing: A Love Story, to access actionable steps you can take to drive uncommon growth for your marketing organization.
Clear your calendar. It’s time to make room for a brand-new approach to annual marketing plans.
The annual marketing planning cycle desperately needs a makeover. Every marketer who has ever groaned, “There has to be a better way to do this!” is right, and the most effective companies are already finding new ways to inject efficiency and effectiveness into a cumbersome process.
While much of this change has been coming on gradually, changing customer behaviors, increasing demands of marketing within the enterprise and growing opportunities with technology have intensified it. And amid growing business uncertainties–inflation, supply-chain and recession concerns–modern marketers feel an urgency to help drive strategy, not just follow it.
More and more, marketers are being asked to deliver value that is tied to the overall business outcomes.
That’s because the customer journey is more complex and less linear every day, highlighting the tension between brand and demand marketing. Our recent research takes an in-depth look at the intersection of these marketing disciplines, tapping the insights of more than 500 marketers. Our findings underscore that an updated approach to planning separates the most successful companies from competitors.
“Today’s marketers are coxing other execs out of their respective silos, moving to “a more agile, `brains in room’ format,” says Tyrrell Schmidt, CMO, U.S., TD Bank, one of our respondents. “We want to build a structure that puts the customer at the center.”
And business leaders are learning that while the annual planning process is still way too full of retro drudgery, it’s also full of possibility and potential. Many see it as the most creative endeavor of the year, allowing them to show off the value modern marketing can bring to the enterprise.
Here are five ways the most effective marketers are reshaping the annual planning process.
Take an Integrated View
Historically, disparate marketing teams have driven different objectives. Because they’re working separately, they’re not optimized for holistic growth. They’re often not even pointing in the same direction.
Marketing needs a more integrated process. That requires cooperation among brand, demand and corporate marketing teams so that they find agreement on all-important basics (We’ve covered other planning checklists in The Eight Essentials of a Successful Marketing Plan).
For starters, these working groups can nail down a common language (“Do we say `initiatives’ or `programs’? `Campaigns’ or `tactics’?”). They can also agree on standard measurements, balancing short and long-term approaches, as well as lagging and leading indicators. And they can establish a set of unified tools, such as an integrated calendar and a single marketing brief.
Focus on Customers-Not the Funnel
If companies want to be customer-centric in how they market, then they need to be customer-centric in how they plan. Yet too many firms lose sight of the people that matter most.
Part of that stems from the limits of funnel vision. Yes, marketing funnels are the conventional backdrop for planning and helping identify specific marketing strategies. And we’re not suggesting companies shift from that approach outright.
But on its own, the funnel does a poor job of coordinating multiple efforts. And by definition, it takes a company or product view. That’s the opposite of customer-centricity.
A journey view helps assess how to best allocate resources to acquire customers and build loyalty. It also has the added vital benefit of revealing missed opportunities in customer experience.
We understand the shift from the funnel to a customer-centric journey can be challenging, and many will ask if there’s room for both. Of course, marketers can–and maybe even should–keep the funnel in mind even as they develop the journey view. But ultimately, it’s the customer who makes the purchase, so anticipating their needs and providing the right solutions matter more than anything else.
Align Under Shared Initiatives
Companies often struggle with overly complicated messaging strategies scattered across multiple product offerings and customer segments. They frequently say they’d like programming with “fewer, bigger, better” ideas but don’t know how to get there.
It’s complex. Because demand marketing has an expanded role in driving revenue, there’s more pressure to crank out more messages and promotions. That means many competing, overlapping, and siloed marketing initiatives reach customers simultaneously.
That can be managed better with unified views of calendars, a hierarchy for messages and promotions, and commonly integrated plans. Those all build more alignment and clarify optimal resource allocation during the planning process. This view then carries forward into activation and more frequent re-prioritization that may be needed throughout the year.
It can also be an important venue to talk about experimentation. Test-and-learn thinking that too often gets left behind in the planning process. Will those NFTs pay off? The storefront in Horizon Worlds? Anamorphic billboards? No one yet knows what kind of return on investment these might have, and they indeed fail the “Bigger, better” test. But fledgling ideas need budgetary support if the organization wants to gain agility and build a marketing edge.
In our research, we found that Marketers who work for businesses that successfully meet goals cite strategic experimentation as the predominant force behind their investment decision-making – perhaps shifting the mix based on objectives. Compare this to marketers who work for businesses that do not successfully meet goals. They, instead, rely mostly on industry best practices and historical effectiveness to inform their decisions – a more static and unchanging approach.
Importantly, planning under a unified umbrella provides satisfaction. Teams can walk away knowing how their plans and responsibilities support the greater business objectives.
Bring the Village
Those shared initiatives require inviting a bigger cast of characters into the planning process. Integrated marketing means inviting more people into the planning meeting. When setting up planning sessions, marketers should reach beyond product and sales to include research and insights, partners and operations.
However, there’s no one size fits all approach. B2B companies may have to think this through differently, often including sales teams and product leaders even earlier, as part of the bottom-up planning process.
Regardless, all companies should include as many perspectives as possible while also keeping their customers in mind.
We recognize that this may bring up concerns about “too many cooks in the kitchen”? You’re not alone. While it can seem clumsy initially, it’s an important first step to being collaborative. The more companies strive to achieve cross-functional consensus, the less “re-work” and pivoting they need later.
Map to Business Outcomes
Our research finds that marketers who describe their companies as top performers actively align marketing activities and tactics to shared business objectives. While many marketing objectives remain essential to the success of the plan’s performance, this calls for bigger thinking. It connects marketing to the goals of other stakeholders in the firm and functions far beyond their own.
The first step is to decide on those “no-regrets” business opportunities and align the most supportive marketing strategies. Many start with a worksheet that looks like this:
The shift toward integrated, customer-centric planning requires weeks if not months of new kinds of preparation. That can include new journey maps and competitive intelligence.
But the pay-off is well worth it. Integrated marketing allows a company to develop a modern approach that connects brand to demand. And ultimately, it serves customer needs better, improves execution and leads to uncommon growth.
Ready to reimagine your 2023 marketing planning process? Get in touch with our marketing and sales team today.
Today’s marketing organizations are experiencing tension between brand marketing and demand generation – a tension that undercuts growth and harms performance.
But it’s time for brand and demand teams to stop thinking in silos and instead, work together in harmony on a shared agenda.
To learn how the most effective organizations balance brand and demand we interviewed 10 senior marketing executives and surveyed 500+ global marketing and advertising leaders for our report: Brand and Demand Marketing: A Love Story.
Key Takeaways
In our research, we uncovered the factors influencing investment decisions and operating model setup. We also looked for ways the best marketers measure the success of brand and demand.
We found that the most effective marketers follow four common principles:
Anchor Marketing Investment in Business Objectives
Blockchains and the tokenization of assets allow marketers to unlock new forms of community development and value exchange with consumers. In this article, we outline how marketers will need to re-evaluate brand building in Web3 based on nine observations. To do this, we’re drawing perspectives from the recent launch of Moonbirds, a non-fungible token (NFT) developed by PROOF Holdings.
While many likely don’t know Moonbirds as a brand, we’re using it as a case because we admire the brand-building mechanics this project is demonstrating within new Web3 possibilities. Moonbirds is an Ethereum-based collection of 10,000 unique Profile Pictures (PFPs). Each token doubles as membership of sorts, granting owners access to an exclusive Discord (a server where owners chat and hang out) along with unique in-real-life (IRL) events and digital membership benefits. The brand mirrors and further builds on proven tactics leveraged by NFTs like Bored Ape Yacht Club (BAYC) from Yuga Labs.
For context, Moonbirds launched on April 16, 2022, raising $66 Million in a matter of hours. In just 48 hours from its launch, it became the top traded NFT by volume, created more than $210 million in additional secondary sales and had a floor price of $62,000 (the cheapest bird available for purchase). Additionally, Moonbirds is already pushing into popular culture. Celebrities like Jimmy Fallon have even changed their verified NFT profile pictures on Twitter.
Though it’s the early days of brand building in Web3 with Budweiser, Taco Bell, Campbell’s, Adidas, Twitter, Gucci and countless others having launched NFTs, we can see why many of these big brands have been comparatively less successful in adopting some of the new rules of brand building.
Let’s use Moonbirds to illustrate nine brand-building lessons for Web3.
People are at the Heart of a Brand’s Reason to Believe (RTB)
Moonbirds was built out of PROOF Holdings which had already successfully launched PROOF Collective, a proven NFT community. The belief in the team – Kevin Rose (Revision3, Digg), Ryan Carson (founder of Treehouse), and Justin Mezzell, an experienced artist, illustrator, and product designer – is the core of why there is a demand for this project. At Prophet, we talk a lot about human-centered transformation. So, much of a brand’s success in Web3 will be built around having strong people committed to building the brand in addition to driving demand, engagement and the overall experience.
Leaders that Drive Brand Content Development and Community Engagement
Content and community for Moonbirds have been largely driven by its founders. Kevin is an avid podcaster (Proof, Modern Finance) and Ryan is one of the more prolific people on Discord and Twitter. Ahead of the launch, they’ve been on a roadshow translating the brand’s vision and building demand and understanding of the project. Web3 brand building will require a greater emphasis on leaders’ ability to be the marketers building demand for their brands vs. the legacy approach of the most junior or outsourced teams managing customer relationships, content creation and communications.
Evolved Monetization Strategies Pushing Perpetual Brand Building
Moonbirds is committed to reinvesting all raised funds in delivering for the community. This means that token holders are delivered value ahead of the brand capturing it. Over time, Moonbirds allows PROOF Holdings to build valuable infrastructure like new technologies, a strong team, community and much more which can be monetized in the future. Tokenizing these assets broadly contradicts the “create demand and sell” model of traditional commerce in favor of developing an always-on, brand-demand flywheel – one that creates ongoing value for a community of token holders. Web3 will push business model design to create sustained demand that engages communities gated by tokens. This will allow brands to collect perpetual royalties in a brand-demand flywheel.
Influencers Become a Rising Channel for Brand Building
Moonbirds unlocked a host of ecosystem partners beyond PROOF’s 1,000-member community to grow the brand. This includes some of the most influential bloggers, vloggers, podcasters, social posters and other Key Opinion Leaders (KOLs) in the space. As media is becoming increasingly decentralized, brands will need to partner and engage KOLs to play a very important role through longer-form audio, video and visual content.
Community Shares in Brand Marketing and Brand IP Ownership
Moonbirds (and other Web3 projects) violate a long-held brand-building belief on Intellectual Property (IP) rights being sacred to the brand. Every owl in the Moonbirds collection is owned by the community member that buys it. These owners have unique rights that unlock new possibilities; from making it their digital identity to designing clothing, to creating a gin brand featuring their unique owl. Some creators go as far as putting brand-built IP for owners into full creative commons (CC0).
“Prophet sees the next wave of brand building in Web3 where marketers rethink IP ownership and its value exchange with their communities.”
While this won’t happen in all industries, Prophet sees the next wave of brand building in Web3 where marketers rethink IP ownership and its value exchange with their communities. These communities will play a powerful role in the brand’s marketing army, sharing in the monetary reward, and helping the brand unlock uncommon growth.
Disruptive Design and Brand Visual Identity Systems
On the surface, Moonbirds design is basic pixelated art. That choice was deliberate so the art itself can live fully on the blockchain. What’s innovative about each bird is a design system that stretches the visual identity of the Moonbirds parent brand into unique community expressions of the owl for each community member. This flexible design system allows for many permutations. The process for building these also involves greater inclusion using a panel of diverse team members to inform design decisions. While not all Web3 brand building will result in individual NFTs, the design will stretch brands into more flexible, disruptive, inclusive, and adaptive visual systems that allow the brand to be more self-expressive, community-minded, and unique.
Continuous Brand Feedback Loops
Moonbirds leverages the 1,000 members of PROOF Holding’s PROOF Collective community to build the brand. These members became an idea engine and feedback loop that drove continued innovation for the Moonbirds launch. Decisions large and small were sourced to make the project more exciting and successful. We see a future of brand building in Web3 that doesn’t purely rely on smart product teams and strategists building brands, but also on open-sourced innovation and rapid, continuous feedback loops from brand communities that shape a number of brand-based decisions and capabilities.
Brand Roadmaps with an Ongoing Sequence of Innovative Activations
Moonbirds’ day-one announcement included a set of innovative experiences and activations they had planned for the communities. These included community meetups along with other IRL events, exclusive merchandise and access to a new version of the Metaverse called Project Highrise. Many legacy brands that have launched NFTs have fallen short by not thinking through such ongoing engagement and gamification or play with their communities. The best brand building in Web3 will solve the Brand-Demand equation by using a series of unique, ongoing and inspiring activations that will propel the brand and communities forward.
Moats Build From a Brand’s Unique Capabilities
Well-known personalities such as Alexis Ohanian (co-founder of Reddit), Tim Ferriss (best-selling author), Gary Vaynerchuk (entrepreneur), along with artists like Snowfro (also ArtBlocks founder), Xcopy, Larva Labs and Justin Aversano make up a partial list of the powerful network built by the founders of Moonbirds. This network allows the team to drive unique relationships and brand activations that can’t be achieved by others. One such signal for Moonbirds was the development of birds with unique space helmets, possibly getting special private tours of the SpaceX facility. We believe the future of brand building will rely on connecting tokenized goods like an NFT into gated access passes to both digital and physical products and experiences that only your brand can uniquely provide. These sources of value will be the true moats for brand building in Web3.
NFTs provide a clear long-term value proposition for consumers that is hard to ignore: verifiable ownership, sharing in a brand’s value and near-frictionless sale and transfer of unique digital goods. This technology will inevitably disrupt nearly every industry (e.g., ticketing, membership, deeds for physical property, all forms of media, etc.).
With NFTs, it is fair to acknowledge some speculation around profile pictures (PFPs) and other art being created as a Ponzi scheme or a way to “get rich quick.” However, adoption continues at an exponential rate and what we see emerging early on, is that these types of NFTs are serving a fundamental physiological function that mirrors luxury goods in terms of belonging and self-esteem. That, coupled with strong communities and different practical use cases (meetups, physical spaces, exclusive access to events) are still being developed.
As brands continue to enter the proverbial build a presence in Web3, much will evolve and marketers should continue to watch the space and learn from projects like Moonbirds.
Want to learn more about partnering with Prophet on driving growth? Contact us today.
Growing Sustainable Fashion: Inspiring Brand Moves for DTC Companies
Although the fashion industry traditionally follows seasonal trends, sustainability is proving to be a year-round wardrobe staple among DTC brands and their customers. Recycled materials, circular fashion and ethical supply chains are capturing headlines as brands depart from a legacy of wasteful production processes and find new ways to revolutionize the fashion industry’s carbon footprint.
Despite the ongoing buzz and urgency, among both customers and brands, to address such issues, the sustainable fashion market remains a fraction of overall fashion sales. Additionally, consumers’ intentions do not yet match their purchase habits. As documented by ecological certification company Oeko-Tex, 69% of millennials report an interest in purchasing sustainable fashion, however only 37% purchase sustainable fashion. This points to a meaningful opportunity to convert that interest into a purchase.
As DTC fashion companies look to expand the ethical and sustainable share of the overall fashion market, they must consider the factors that are hindering consumers from purchasing more sustainable garments. The high price point of sustainable clothing, low awareness of the environmental impact and lack of trust in sustainability claims have been clear limiting factors.
Brand loyalty stands out as a key strategic move that DTC companies can immediately pursue to increase their share of the sustainable fashion market and help grow the industry overall. Brand loyalty can help DTC companies increase their relevance amongst consumers and break down some of their hesitations about sustainable fashion.
To increase brand loyalty in fashion sustainability, successful DTC brands often focus on one, or both, of the following:
Brand message
Brand inspiration
These levers are powerful ways to shape consumer perceptions and drive enduring loyalty.
1. Building Loyalty Through Pervasively Innovative Brand Messaging
DTC fashion brands that are truly pushing sustainability forward and not resorting to greenwashing are building lasting brand relevance and loyalty. Some consumers are wary of brands that talk about sustainability without the innovations in the supply chain, or a business model to back up the claims. DTC fashion brands that create innovative messaging on sustainability have a chance to win in the market.
The LA-based sustainable clothing brand Reformation offers a powerful example of a profitable DTC fashion retailer that has managed to combine growth with genuine innovation in sustainability. Reformation has made understanding sustainability more accessible for consumers, by publishing environmental impact data and content for each individual item on its website. Its sustainability report from 2020 also highlights how it works with supply chain partners to utilize clean chemicals and ensure that 75% of its fibers meet its two highest standards for sustainability.
Reformation has also been a pioneer in making sustainability content feel approachable through clever taglines like “Carbon is canceled” and “Being naked is the #1 most sustainable option, we’re #2.” All in all, its commitment to building a community of loyal and environmentally conscious customers through DTC brand practices has shown great success.
2. Building Loyalty Through Distinctive Brand Identity
While important, innovation in sustainability messaging isn’t the only tactic necessary to drive DTC brand loyalty. DTC fashion companies must have distinctive, inspired products and a brand identity to match. The Business of Fashion’s profile of the divergent paths of DTC brands Vuori and Entireworld offers a cautionary tale of what happens when companies are not distinctly inspired. Vuori is a clothing brand that sells activewear and athletic clothing, while Entireworld was a leisurewear brand.
In October, Vuori secured hundreds of millions in investment to expand its activewear brand, while Entireworld shuttered. In addition to profitability, much of Entireworld’s failure was due to its undifferentiated product. Vuori launched new segments like men’s activewear and surf apparel, whereas Entireworld struggled to compete solely on its sweatsuits. Without new inspired apparel pieces and adjacent products, Entireworld failed to stand out in the marketplace.
“The high price point of sustainable clothing, low awareness of the environmental impact and lack of trust in sustainability claims have been clear limiting factors.”
Distinct inspiration has also allowed emerging fashion brands like Ahluwalia to gain an obsessive customer following. Ahluwalia’s designer Priya Ahluwalia has built her collection around repurposed vintage pieces. This signature look is gaining attention for breaking the mold and Priya has received industry-wide recognition winning the prestigious 2020 LVMH award amongst others. Ahluwalia’s pieces stand far outside the fashion norms that retailers like Zara and H&M adhere to, and this has built a small but loyal following for the brand.
However, the pressure doesn’t stop with consumer demand and creative competition, recent legislative pushes, like the Fashion Act in New York state, could require companies to “map at least 50% of their supply chains and disclose impacts such as greenhouse gas emissions, water footprint and chemical use.” This development indicates that the mandate for a more sustainable fashion industry will not diminish anytime soon.
Reformation, Vuori and Ahluwalia demonstrate that on the path towards sustainability, DTC fashion brands are far from uniform. However, at their core, these brands share a drive to grow through innovation and inspiration that sets them apart from competitors. Most importantly, sustainability is at the heart of their brand story.
Prophet’s Vice Chairman, David Aaker says “The concept of a signature story – an intriguing, authentic, involving narrative – applies the power of stories to strategic messaging.”
Learning to create and leverage signature stories has truly become a “must-have” management competence. Companies that focus on brand loyalty through innovative brand storytelling and an inspired identity have an opportunity to grow market share now and in the future in the sustainable fashion market.
Prophet is working with leading DTC companies in fashion and across industries on brand strategy, growth strategy and performance marketing. Interested in finding out more? Contact us today.
Organizing Brand-Demand Marketing Teams for Success
In the fifth and final installment from our Brand-Demand Love series, informed by our conversations with marketing leaders across industries, we’ve outlined the steps to integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.
If we think of marketing organizations as households, they are often not very harmonious, thanks to the common tension between brand and demand generation teams. Our blog series has described why these two marketing disciplines struggle to work together to achieve mutual success. To attain productive and peaceful integration, brand and demand teams must define the best ways to organize people and teams, collaborate productively and deploy the right capabilities and tech.
Overcoming Fragmentation
In our discussions with marketing leaders, the brand-demand split in organizational structures was a common challenge. “One of the big barriers for marketing in our industry is how we’re structured,” a technology CMO told us. “There’s the performance marketing team on one side and then there’s everyone else, including brand people, on the other.”
In many businesses, brand and demand are viewed as unrelated capabilities, run by disparate teams with little to no insight into each other’s activities or results. Other common symptoms of unhealthy brand-demand organizational structures include:
Separate planning cycles and budgeting exercises
Distinct KPIs that often do not align with broader business objectives
Lack of knowledge sharing
Talent deployed to standalone channels or capabilities, with little cross-functional collaboration or rotational assignments
When marketing teams are organized this way, it’s impossible for brand and demand teams to communicate openly, share data freely, or collaborate productively – much less fall in love again.
A manufacturing vice president of marketing told us that fragmentation is largely down to leadership:
“If your teams are fractured and chaotic, that’s because your leadership is fractured and chaotic.”
This speaks to the importance of leadership in ensuring different functions work together toward shared, big-picture goals.
Rethinking the Marketing Organization Chart
There’s no single ideal structure for a marketing organization, but certainly, brand and demand should not be managed as separate entities. Some top performers organize their teams around customer type, while others use product line, channel or functional discipline. Again, there’s no definitive best practice. A B2B manufacturer that restructured its marketing operation around how customers buy, rather than product lines, became more responsive to business needs.
Marketing at 7-Eleven is organized by discipline, according to CMO Marissa Jarratt, but with a recognition that no one works in isolation. For instance, the company established a customer analytics and insights team to inform business decisions. “Then came the responsibility to socialize those learnings across the organization in a thoughtful way,” she said. “You can have really smart people, but it has to be a team sport.”
Fostering Collaboration
No matter the organizational model companies choose, collaboration is key. Collaboration can take many forms:
Joint strategic planning sessions
Monthly knowledge-sharing sessions
Flexible campaign planning exercises and roles, including metrics definition and budget allocation
Integrated campaign performance readouts
All of these activities can – and should – include external agencies, consultancies and other third-party providers, as well as in-house agency capabilities where relevant. “We need holistic collaboration from our partners to help us work through our evolution,” said Shelley Haus, CMO of Ulta Beauty. Indeed, several marketing leaders who we interviewed considered external partners to be part of the marketing organization and capable of helping bridge the brand-demand divide.
Collaboration can also help solve tactical issues. For instance, brand and demand teams both want efficient and effective content marketing capabilities, which require coordination and asset sharing. “We need atomized content approvals and integrated digital asset management flows so content and images can be reused quickly and easily by many teams,” said a senior marketer at a large financial services firm. “Otherwise, teams can’t streamline timing or use a ‘test-and-learn’ approach based on integrated results from everywhere.”
Boosting Brand-Demand Integration Through Capabilities, Talent and Tech
Several marketing leaders we interviewed talked about the pressing need for new talent. Everyone is looking for data scientists, business analysts and digital strategists; thus, brand and demand teams should look to share in-demand specialist resources.
More than one marketing leader described the need for more communication and training across disciplines to promote better understanding. Job shadowing and rotational assignments can help in these areas. Another challenge involves varying experience and backgrounds: “Brand marketers run the show and they all went to the same business school, while performance marketers all come from DTC brands,” said Ashley LaPorte, ex-CMO at Seventh Generation. Organizational design and cultures that emphasize collaboration and shared goals can help overcome these barriers.
Compensation models and incentives are other effective levers for driving integration between brand and demand. Defining joint performance goals tied to overall business performance may facilitate the shift away from time and expense cost models to more incentive-based pay models, which would encourage brand and demand marketing teams to collaborate more frequently.
Technology has a role to play as well. A strong MarTech stack can successfully integrate data across disparate sources and promote connectivity among different functional areas. Adopting content personalization at scale requires integration across brand and demand teams – and their corresponding tech stacks. Performance marketing functionality can also be embedded directly into tech platforms to give brand teams more access to relevant insights and tools.
The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact. Download today!
We believe the most successful and productive relationships – in business and in life – involve shared goals and commitments. Achieving these goals requires collaboration, communication and an effective division of labor. For brand and demand teams to deliver optimal performance in line with their shared goals, they must organize their “home” in ways that reflect and support these principles. Because brand and demand must live together, we’d recommend they aim to do so with utmost harmony and respect for each other’s unique genius and power. That’s how they can reignite the love in their relationship.
Do you need help breaking down the silos separating your brand and demand marketing teams? Our Marketing & Sales practice can integrate your teams to achieve mutual success. Get in touch.
While sales and marketing have always required a bit of art alongside science, Prophet’s latest 2022 Brand Relevance Index® (BRI) shows that the balance is shifting. The COVID-19 crisis has changed how people consider brands, increasing the human tendency to consume emotionally. In today’s climate, we want to feel brand love before we deploy our dollars. We want to buy from companies that make us feel good, seamlessly marrying depth of relationship with convenience and meaningful experiences. And, ultimately, that’s changed how demand is actualized.
Leaders of this year’s index–our seventh–reveal these new patterns. The best brands are increasingly finding success in our new normal by the way they connect with us as humans. Some go right to the heart, building emotional resonance. Others appeal to the head, drawing us in with practical benefits. A small group of all-stars, led by Apple, Peloton, Spotify, Bose and Android, manage to do both.
Even when faced with significant speed bumps, these companies know customer relationships are everything in the world of demand generation. Relationships sit at the intersection of growth, experience and data. Brands that understand that dominate this year’s index. They are prioritizing innovation investments in the service of customer needs. The most relevant marketers push beyond the status quo, driving brand marketing investment to conversion.
We see them acing demand generation in two ways. Relevant brands are …
Deepening Relationships
The next iteration of acquisition and retention is maintaining devoted relationships with customers. Peloton, which ranks #2 overall and comes in first in our “Heart” metrics, perfectly illustrates that brand passion. Devotees could care less about its sputtering stock valuation. They just prize it for the rich experience, and the ongoing value exchange between consumer and company, across channels and touchpoints.
Relevant brands like Peloton have built products that seamlessly integrate into the lives of their customers and then rely on advocacy to promote pipeline. When something is indispensable to us, it’s easy to inspire others to participate. Tactics like Peloton’s “refer-a-friend” are mutually beneficial and authentic.
Spotify (#3), PlayStation (#7) and USAA (#10) are also thriving on the rich sense of discovery and community-building.
Fostering customer relationships requires a transition from investment to brand perception metrics. And it calls for prioritizing improved retention and loyalty models that focus on relationship longevity.
Demand generation and performance marketing allow brand marketers to relentlessly test and learn. When relevance is a moving target, performance branding will enable us to reach customers in new ways and experiment with tactics. Performance marketing is the finger on the pulse of all relationships.
Monetizing Experiences
It’s not news that the brands at the top of the index are known for providing engaging and unforgettable experiences for customers. In turbulent times, relevant brands help people feel safe and make life easier. They encourage us to experience parts of ourselves that we’ve missed in this constrained pandemic period. Generating demand and monetizing these trusted experiences requires careful finesse.
Increasingly, we see opportunities for investment in revenue streams through user interface and experience. Innovative brands are reframing go-to-market strategies. For example, some are redefining sponsored commerce beyond traditional search and banner ads, building an ecosystem for media that can extend into brand-owned properties, channels and ad units. These brands have an opportunity to explore what we call “BYO (build your own) Walled Garden,” obtaining both valuable first-party data and ad revenue.
“Innovative brands are reframing go-to-market strategies..”
Apple is the most obvious example, moving from device-driven relationships to becoming an arbiter of news, music, video and apps. It’s no surprise that it’s ranked #1 since we started our relevance research in 2015.
Companies like Fitbit (#8), TED (#9) and Teledoc (#21) are also flourishing through expanding ecosystems.
Others are gaining relevance through the rise of open payment architecture. Afterpay (#11) leads our index in financial services, showing that consumers value digital-first, customizable solutions that are reliable and transparent. Of the 293 brands we measured, it ranks #1 in the “Lives up to its promises” attribute. These “Buy Now/Pay Later” models afford trusted and convenient opportunities for customers to transact in channel. And they create new revenue streams for savvy organizations.
These customer-acquisition efforts have a direct influence on brand perception–both positively and negatively. And they are increasingly defining cross-channel customer strategy. As the marketing value chain collapses, we have instantaneous feedback between brand-marketing investment and revenue attribution. Growth-minded CMOs find the delicate balance in customer experiences that support both brand and demand.
The Future of Branding is Performance-Oriented and Vice Versa
We see first-hand the value clients achieve when they overcome capability silos–even within marketing. Coordination across customer-facing disciplines is fundamental for building relevance through customer understanding, targeting and addressability. It’s also critical in achieving greater precision in measuring upper-funnel brand impact, both due to data and experiential continuity.
To achieve uncommon growth, brands have to measure the sales stimulation that arises from brand awareness and perception shifts. With marketing fatigue and increasing budget pressure, the onus is on brand advertising to evolve from “spray and pray” to value-added and relevant placements.
Likewise, performance marketers need to lean into the incredible value of a beloved brand. Demand generation must support–not undermine–brand trust, love and relevance.
Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love.”
Brand-Demand Love: Achieving Success and Satisfaction Together
Informed by the conversations we’ve had with CMOs across industries, this fourth installment from our Brand-Demand Love blog series explores how to integrate brand and demand marketing capabilities to win in a complex and dynamic landscape.
Even in the most complimentary relationships, financial matters are often a source of significant stress. For brand and demand-gen marketing teams to achieve the fully integrated and highly productive marriage we have been describing so far in our series, they must address the potential friction points involving budgeting, investment and performance measurement.
Agreeing on big-picture goals and investment priorities is the first step, followed by defining metrics to track performance. Receptivity to new approaches and flexibility to adjust as needs change is also key. As our research with marketing leaders has made clear, these issues are critical to unleashing uncommon growth through more effective and agile marketing capabilities across the customer lifecycle. Brand and demand teams ultimately share a pocketbook and prosper (or struggle) together.
Building Balanced Budgets and Allocating Investments Equitably
Many marketing leaders confess to being “obsessed” with finding the right investment mix. There is no shortage of conventional wisdom on how to allocate budgets and balance the investment mix. One common industry standard is the 60/40 rule, an investment recommendation proposed by Binet & Field’s 2013 study. The thesis: Allocating 60% to brand and 40% to demand yields the most effective balance of near-term acquisition and long-term performance.
Such rules of thumb seem to offer quick, evidence-based solutions. They also help defend brand investments, as many marketers want—and feel an urgent need to do—as e-commerce and digital have gained the upper hand in budget battles. However, this may not fully account for the variables of consumer behavior, broader market trends or the unique business contexts faced by different organizations. Modeling investment and measurement decisions against product lifecycle stages (e.g., product launches, mature offerings) can help marketers track progress toward specific goals.
Marissa Jarratt, chief marketing officer of retailer 7-Eleven, seeks to manage marketing investments like a portfolio. She balances higher-risk bets that offer big potential upside while also making safer plays that bring more predictable returns. “This is becoming more of a science,” said Jarratt. “We’ll take risks if we think it can drive a target downstream impact or outcome.” Such a balanced view of risks and rewards helps optimize the media mix across funnel stages and seasons.
Sudden market shifts put a premium on agile planning and budgeting. As Ashley Laporte, director at communications firm RALLY, told us:
“It’s not about finding the perfect proportions to balance brand and demand but finding a flexible framework that understands how everything connects.”
Mastering the Metrics and Digging into the Data
Performance metrics and attribution models continue to proliferate and evolve. There has been a pronounced shift away from brand surveys toward more agile measurement approaches. The leaders we interviewed expressed uncertainty about which metrics and KPIs are the most accurate and how to enable insight-based decision making.
Even firms that can transcend traditional difficulties in measuring brand performance face challenges. As Jennifer Warren, VP of global brand marketing at Indeed, told us, “Business and finance leaders want to know how a 2% lift in consideration translates to sales and revenue.” Such visibility is difficult to achieve, as is determining ROI on long-term, multi-year brand investments. Marketers are now being asked to develop KPIs to measure the effectiveness of purpose-driven strategies around sustainability, for example, or diversity and inclusion efforts.
Despite the challenges, being data-driven enables marketers to speak the language of the business. As Portia Mount, VP of marketing, commercial HVAC Americas at Trane Technologies, put it, “When financial leaders say, ‘let’s cut all the brand stuff and just do demand,’ our job as marketers is explaining what the impact will be if we shut something down.” Better performance data and stronger customer insights make for more productive conversations in explaining that choosing between brand and demand is not a zero-sum game.
“I don’t think that there is a silver bullet for measurement,” said Tyrell Schmidt, U.S. chief marketing officer, TD Bank. “We are really careful not to oversell performance, which is easy to do because it always drives the fastest results.”
A Shared View Builds a Shared Stake
Demand-gen leaders also face challenges in tracking performance as major tech companies like Google and Apple work to shift away from the use of cookies. Consumer goods firms struggle to get point-of-sale performance data from partners (e.g., e-commerce platforms and big-box retailers) and look to fill the gap with third-party data (e.g., credit card records, basket analysis). The bottom line: as much data as marketing leaders have, they are always looking to attain the most relevant data.
The lack of alignment between brand and demand adds another layer of complexity. Today’s “incongruent” KPIs result from a lack of incentives to “play nice,” according to one CMO. Ideally, rich data and aligned KPIs are used within an agile budgeting and forecasting model that incorporates multiple time horizons (annually, quarterly, daily) and enables opportunistic, real-time adjustment.
Integrated performance dashboards accessible by both brand and demand teams have enabled some firms to generate holistic insights by combining both short-term (e.g., search data) and long-term (e.g., Net Promoter Scores) metrics. These efforts reflect the need for marketers to experiment and innovate in their approach to financial matters. At Prophet, we recently partnered with a health services client to develop an integrated performance dashboard across brand, demand and customer experience teams, enabling a cross-functional understanding of campaign performance.
Summarizing the Questions You Need to Ask
Looking ahead, brand and demand teams must commit to open communication and engagement to achieve a strong and harmonious relationship. When it comes to financial matters, flexibility is also key. In order to pave the way to a household of shared finances, you need to ask the right questions and the following are worth considering in setting the right investment priorities and measuring the effectiveness of collective efforts:
How much impact does brand marketing have on conversion?
What impact do customer acquisition efforts have on brand perception?
What’s the appropriate level of investment across brand and demand without sacrificing overall performance?
What do specific metrics tell us? Which metrics are most meaningful and why?
Are we measuring campaign performance holistically and across the funnel?
Do we have a shared view of brand and demand and how they connect to the business in the short and long term?
Are key measurements used to inform annual planning cycles?
The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact. Download today!
In our next post, we’ll look more closely at how to set up a “happy household” – that is, organizing teams and building the right capabilities so brand and demand can have a comfortable nest for their life together.
If you’d like to learn more about how your organization can overcome common challenges while integrating brand and demand marketing capabilities then get in touch here.
The state and success of digital transformation varies considerably around the world, with some distinct disparities between the digital “haves and have-nots.” The latest global research report from Altimeter, a Prophet company, provides not only detailed insights on the differences between individual markets but also some key learnings.
The U.S. market, for instance, is largely looking past digital transformation, having invested heavily during the last 10 years to replace legacy infrastructure and migrate more operations to the cloud. U.S.-based firms today are focused on strategic innovations (e.g., greater customer-centricity, digital product development). However, China, which never had to contend with outdated systems, was able to leapfrog ahead to advanced apps and immersive digital experiences.
In Europe, there is a wide variance of digital maturity. The U.K. market looks more like the U.S., but Germany is not quite as far along on its digital transformation journey. It’s also important to note that the most advanced firms in Europe have reached the same level of digital maturity as digital leaders in China and the U.S., but average firms generally lag compared to their global peers.
Europe is Catching Up in Its Digital Transformation Efforts – Quickly Enough Though?
Taking a closer look at Altimeter’s data in terms of C-level sponsorship of digital transformation initiatives, the U.K. has the highest tendency to appoint a CDO or CIO to own and/or sponsor digital transformation. However, Germany and the U.S. tend to rely marginally more on the CIO or CEO. At the same time, more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results.
A potential reason for this is that European firms are somewhat more conservative in their approaches to transformation overall. For instance, German firms prioritize employee engagement, digital literacy and operational efficiencies in their digital transformation agendas as much as they do growth. Innovation, on the other hand, is a much lower priority.
U.S. firms are notably more focused on profitability and revenue in their digital transformation programs than their European counterparts. It seems that many European firms are focused on keeping in step with their peers and competitors and that’s especially true in Germany. The implication is that many established European companies are still building a digital foundation for the future.
“more American and Chinese firms report excellent results from their digital transformation programs, but most European companies report that they only have good or fair results”
U.K. organizations are the most likely (69%) to cite using digital technology as an opportunity to become more efficient, perhaps partially reflecting the need to improve their lagging productivity rate versus the U.S. (46%), Germany (42%) and China (52%).
German organizations (58%) are the most likely to view digital technology as a priority investment to replace outdated or obsolete technology, as compared to the U.K. (40%), U.S. (39%) and China (18%).
Europe Invests Long-Term and the U.K. Adopts Agile Working Methods
Compared to U.S. firms, European firms also have longer-term expectations for their transformation investments. At least 40% of surveyed companies in Germany and the U.K. expect it will take at least two years to see positive results from transformation investments, versus 31% of U.S. firms. One reason for the longer time horizon is the relative lack of sufficiently digitally trained staff, which is a bigger challenge in the U.K. and Germany than it is in China or the U.S.
Of course, Europe cannot be considered a monolithic market. There are substantial differences between the U.K. and Germany. The U.K. firms surveyed have adapted better to digital transformation by, for example, adopting agile working to a greater extent than those organizations in Germany, which are more likely to have process-driven cultures. Additionally, data silos are a much bigger problem in Germany compared to the U.K., which shows more leadership in data science.
In Germany, digital marketing is still mainly viewed in terms of ad campaigns. And in both the U.K. and Germany, digital marketing is generally below average in owning the customer experience. There are also varying priorities for the future: U.K. firms put less focus on hiring and training in digital transformation and as a result, business model changes are less likely to happen in Germany. Also, cybersecurity and cloud adoption are important priorities in the U.K., while cross-functional collaboration platforms are of less relevance in Germany.
Don’t Focus on Infrastructure, Focus on Creating an Agile Organization
Our digital transformation research, as well as our market experience, suggests that firms are better served by focusing on organizational changes and improved agility rather than updating infrastructure. After all, infrastructure is constantly advancing so that’s a job that will never be completed. But increased organizational adaptability and agility will help organizations adjust to ongoing change and proactively drive it.
Approaching these challenges in the right way is key. To do so, companies should follow a three-step approach:
Digital Benchmarking: Conduct a rapid heatmap assessment of your organization’s (enterprise-wide) digital transformation maturity. Identify where the opportunities for improvement are, and how your business benchmarks against best-in-class digital maturity (both in your market(s) and globally).
Digital Immersion: Run a digital innovation workshop with key stakeholders across your organization to share the latest digital trends (not just specific to your industry, but also apply learnings from other industries) and explore the digital art-of-the-possible to identify opportunities for augmenting your own digital transformation journey.
Digital Mobilization: Build (or revisit your existing) digital transformation vision and roadmap, ensure all roadmap initiatives are tied to commercial value and make certain tracking mechanisms are in place to guarantee the realization of this value.
Looking ahead, companies in Europe, particularly in Germany, must address many of the same challenges that U.S. firms (and the more digitally mature companies in Europe) have started overcoming already. That means breaking down data silos, converting raw data into actionable insights and adopting more agile ways of working.
How does your company stack up in the digital transformation stakes? Get in touch today if you’d like to benchmark, excite, transform, and unleash the full power of your business.
How Effective Go-To-Market Strategies Unleash Brand-Demand Love
The third post in a series about integrating brand and demand marketing capabilities to win in a complex and dynamic landscape.
We think it’s time for brand and demand to fall in love. After all, they’ve long been attracted to each other’s strengths and can shore up the other’s shortcomings. When brand and demand build a strong, sustainable and mutually satisfying relationship of equals it lays a foundation for increased brand relevance and ultimately leads to uncommon growth.
Like the best marriages and strongest teams, a commitment defines what is possible. Bringing complementary skills together leads to greater mutual success. In talking to senior marketing executives, we heard passionate interest in unifying marketing at every level and taking an integrated, agile and data-driven approach.
If one were to equate a relationship’s declaration of commitment to a declaration of commitment between brand and demand marketing organizations, one may reference a marketing go-to-market (GTM) strategy. An effective GTM strategy provides strategic guidance for achieving an organization’s performance goals across key channels and disciplines. Despite the importance of this guidance, marketing organizations continue to face challenges in developing an integrated GTM strategy across their brand and demand teams, leading to misaligned activation plans which ultimately impact the efficacy of campaign efforts.
The Prophet-developed framework described below highlights the key components of effective go-to-market strategies that powerfully combine the best of brand and demand. They are important because achieving the appropriate brand-demand balance is a constantly moving target, meaning GTM strategies must be designed for flexibility and ongoing adjustment.
Key aspects of the CMO agenda – from audience strategy to creative and content – are central inputs to designing an effective brand and demand capability. Indeed, they are the vows by which brand and demand teams can build solid and successful relationships.
Marketing GTM Strategy Framework
There are six key areas to address as part of an integrated go-to-market strategy, each with its own set of requirements and implications for execution.
Brand Strategy: Brand Position, Architecture, Key Messages, Voice and Expression
The brand strategy forms the core of the brand identity and should manifest itself clearly and consistently across brand and demand campaign initiatives.
Audience Value Propositions: How to Win with Your Audiences
Audience value propositions describe the reasons audiences should have an interest in your brand, product or service.
Customer Data and Insights: What You Need to Know About Your Audiences
The successful utilization of customer information provides insights into their behavior and opportunities to convert across channels. Both brand and demand campaigns generate key customer insights which can be used to improve all campaigns (for example high-performing digital placements on the sports-oriented websites may provide a rationale for purchasing TV ads on sports networks and programming). Establish a pipeline for sharing customer data and insights between teams.
Pricing and Distribution: How and Where Audiences Will Find Brand, Product or Service
Understanding how customers can acquire your product or service, including the cost associated with that acquisition, is a key consideration. While demand channels can provide a direct path to conversion, the impact of brand channels shouldn’t be ignored.
Creative, Content and Channel: Content and Experiences Will Attract and Convert Audiences
Creative and content contain the messaging and imagery that will connect audiences to your brand, product or service. While creative formats vary across brand and demand channels, a holistic analysis of creative performance provides opportunities for greater insights and improved content creation.
Media & Channel Communications: How, Where and When You Will Find and Engage Audiences
The touchpoints by which a customer can be reached and converted are important facets of any GTM strategy. An integrated model requires a mutual understanding of media campaign strategy and channel selection.
When developing a go-to-market strategy, it’s crucial to understand the implications for both brand and demand marketing teams. While each team is responsible for the successful deployment of campaign efforts against their respective channels, their measure of success should align against the overarching goals of the organizations as set forth by the GTM strategy. Organizations should avoid us vs. them mentality when crafting their organization and recommendations but instead account for the holistic impact of their recommendations against an aligned, cohesive goal for the organization at large.
Again, there is no set formula for effective brand-demand integration. Even if there was, it would fluctuate based on multiple market variables. That’s why these strategic principles are so powerful – they keep marketers pointed toward the “north stars” of business strategy and organizational purpose while enabling the necessary recalibration of campaigns, budget allocations and other levers that produce strong outcomes.
In our next post, we’ll look more closely at the financial and pocketbook implications of brand-demand love. Specifically, we’ll examine how:
To define shared goals
Set an investment agenda
Define smarter metrics for allocating budgets and tracking performance
Highlight how brand and demand can stop fighting about money
The new research report, “Brand and Demand: A Love Story” is here! Learn how today’s Brand and Demand Generation leaders are bringing their functions together to drive greater impact. Download today!
Understanding where brand and demand might have shared foundational components, from brand strategy to creative and content distribution, can create shared value across marketing objectives and enable greater agility between brand and demand goals. This sort of synergistic and complementary relationship is what we mean when we talk about brand-demand love.
Get in touch today if you’d like to learn how to develop effective go-to-market strategies to unleash your company’s “Brand-Demand Love”.
