Getting Real: Baked-In Marketing

"Baked in: Creating Products and Businesses That Market Themselves" is a brand new book by the two US authors Alex Bogusky and John Winsor about marketing. This book provides a refreshing perspective on the purpose and the progress of marketing.
(Disclosure: I do have no business relationship with the authors or their firms; they have sent a free copy of their book for review to me.)

Actually, the authors are top ad guys in the U.S. with Crispin Porter + Bogusky. They know what they are talking about and they have made a convincing case why mass marketing is dead.

And, they show, what we can do instead. Because, it is time to put a stop on this kind of "marketing", where the CEO orders the marketing manager to try to sell some kind of product or service that nobody really wants.

Add-on Marketing Is Extinct
In fact, this "add-on" marketing - first to produce something and then to try to sell it - was never really marketing. However, the fact that this worked at all was temporarily possible due to an era when mass media reigned supreme.

Because, there was a time - our parents know it - when nearly all families viewed the same news, shows, soaps and, yep, advertising.

These times of mass media are long gone, but the advertising industry is still struggling about how to regain the power of the campaign: Spending millions and moving the masses .... It was just so simple and profitable. And it´s over. Face it.

The Single Most Powerful Marketing Tool
However, Bogusky and Winsor propose in their small, but essential book that today, marketing must be baked into the product and service.

Basically, they demand that we should use our creativity and integrate marketing, product design and advertising into one highly useful, value-loaded package of consumer delight.

The message of the book is clear: the product / service itself is the most powerful marketing tool. Yes, we all know that. However, why don´t marketers act on this knowledge?

In fact, the new product failure rate is up in the 90% range. At the same time we get dozens of similar offers every day. We are flooded with communication, ads and direct mail garbage shouting at us to buy a me-too version of some commodity.

Instead of pouring their hard earned money into really hot and useful products and designs, the marketing guys are trying to dupe us to buy the same-same once more. They call it "creating awareness", "brand preference" or "purchase intent"..... Shareholders call it: a waste of money.

Creativity Is the Key to Baked In
This is the key idea and premise of the book: Stop wasting money and start using your creativity of your people to deliver something consumers really want, love, take part in, co-create, embrace, recommend, enthuse about, adore, desire, etc., etc.

The biggest part of the book consists of 28 "recipes" on how to go for creating value and how to bake in marketing into the product itself.

Some recipes are really tasty, others we have cooked before (with Tom Peters, Blue Ocean Strategy, Market Busters, Lateral Marketing / Kotler, etc.), and others may turn out inedible (that´s okay, at least we tasted it).

Nevertheless, they provide a great many ideas with examples on how to make it better. From culture, through organization, to stories, to thinking habits, to attitudes, to processes and so on. Each recipe can bring some flavor to the process of creating a better product with baked in marketing.

One of the strengths of the book are the real world marketing and brand examples, which make the read easy and enjoyable, but also provides a tangible dimension to applied creativity.

Twitter @Bakedin #Recipe
There is a cool twist to the recipes. Because for each recipe the authors set up a twitter name that can be found on their blog www.bakedin.com where the cooking is going on in real time. This is user generated brewing & boiling of the finest cuisine, a la Web 2.0.

This crowd-sourcing allows every reader of the book to actually help to write forth a current and online version of the book. So if you do not like the taste of some recipes, just change it or make an entirely new one and post it on @Bakedin.

Does Baked In Work in the Real World?
When starting to "bake in" the marketing in our business, does the book help? Yes, definitely. The best way is to just test some recipes and you will cooking for a while on each of them.

When applying the recipies, I found the book makes a somewhat idiosyncratic journey in terms of the suggestions. For more structured minds, we would miss an organizing bracket that relates the various recipes to each other. Even if it would restrict the highly creative spirits.

We should not hold the authors´deep background in marketing and their strong creative streak against them, however, there are some non-marketing issues that are neglected. In fact, many of the suggestions aim to improve the processes of organizational learning and applied creativity.

These change management issues are tough challenges, especially for companies caught in functional fiefdoms and traditional structures.

Nevertheless, the book provides more than enough value for anyone seriously interested in winning the trust and the business of customers.

Baked In Applicable for European Marketers
Sometimes European marketers are sceptical towards the great enthusiasm of their US colleagues about such new trends. Therefore, the question of how the book is applicable for the European situation deserves an answer.

My answer to this is: even more; In many respects the Europeans need the lessons of this book even more badly. Because the attitude in Europe still too often is: "we know better" than the customers or a "we tell them what´s right" kind of elitist smartass arrogance.

The best cure to that kind of delusion is to jump right into the kitchen and - together with your colleagues, with real, tangible customers and with other creative spirits - "bake in" real marketing innovations in your products and services.

Marketing Cost Cutting in Downturn

Marketing budgets have been severely cut during the economic downturn. A recent study by the Finance Marketing Association in Vienna found that up to 60% of financial marketing departments have responded to the crises by cutting costs. Is this wrong? Not necessarily.

Looking at the dire situation from the point of view of the agencies, they should shoulder some of the blame for this reduction of marketing budgets. Why? Because in economically strong times the agencies sold anything and everything to image-obsessed CMOs and CEOs.

The main consideration seemed to be that the client manager was "happy" at the moment of campaign launch. Concerns about the Return of Investment (ROI) of such campaigns were an afterthought, if at all. Maybe they were eager to win one of the prestigious prizes, but it was not cash they were after.

Insightful is the fact that the only category getting more budget in the crisis is direct marketing. This makes sense, because direct marketing is much more performance oriented and supports the hypothesis that performance was lacking until now.

Also, the explanation that companies cannot "afford" the marketing budgets seems odd. This sounds like marketing is something like luxury, reserved for good times. In fact, marketing needs to be an investment. And like every investment it needs to return the cash plus a profit margin.

Taken it from this angle, the solution is quite simple: rigorous marketing controlling with pre-testing and performance measurement, based on hard data.

However, this is not an entirely new thought and many agencies would offer it to their clients. The only question then is why it was not marketed before?

Globalization - Rules of Global Business

Globalization has brought to us the world-wide exchange of goods and services together with broad international connections in cultural, political and financial terms. Many managers have welcome this as an opportunity for increased growth.

New markets with millions or even billions of potential customers make every marketer´s heart jump with joy. The idea is to source from the global market cheaply and then export it with high value and profitable prices to countries with needs.

However, globalization has profound consequences in the way of Schumpeter´s "creative destruction". Whereas this is an ongoing process for all, especially the European countries are lagging dangerously, hiding behind obsolete protectionist and unsustainable barriers to competition.

Not only does the current financial and economic crisis put up a strong mandate for excellent management of global business. This serious recession makes the mandate to change more urgent and pressing for top managers, leaders and statesmen.

How to master the global business challenge? Here are some proven rules:

1. Extend your personal and organizational perspective to global matters; open up your world to what is out there, take it in and learn from new realities - if you like it or not. Start here at the lonely planet guide .
   
   
2. Secure the facts and knowledge about global markets, the trends, risks and opportunities; replace hear-say, half-truths and pseudo-knowledge with systematic understanding. Start here: global edge, university washington library, CIA world factbook, stat usa, or internet world stats .
   
   
3. Develop clear international business goals and strategies; these need to be realistic and worked out in required detail, while keeping room for adaptation to accomodate local or temporal changes. Start learning here: OpenCourseWare MIT or here Kellogg Insight .
   
   
4. For market leadership, the right positioning is key to success; research and establish the right position in the respective markets and back it up with branding resources. For branding and positioning see MarketingProfs Branding, Copernicus Marketing or B2B Branding .
   
   
5. Accept, respect and integrate local culture and quirks; leave local decision makers to adapt the goals for optimal implementation. Execution is always local, not only in marketing, but in all functions. For details, look at cross culture communication, WorldBusinessCulture, or
   
   
6. Leverage existing market infrastructure, channels and providers and build alliances and cooperations; to build everything from scratch is seldom necessary or profitable. Select high-quality partners and tie them to you. See US Commercial Service, German Chambers of Trade or Austrian Trade.
   
   
7. Get started now with this one page marketing plan template. For details on starting, just look into yourself! Good luck!

Marketing for Retail Banking in CEE countries

Having been invited to present in front of about two dozen CRM & Marketing Managers of a leading CEE retail bank, this taught me valuable lessons from the trenches. As there are many CEE banks headquarterted in Austria, like Raiffeisen International, Bank Austria UniCredit, Erste Bank, Volksbank, Hypo Alpe Adria, there is a vibrant demand for our specialized knowledge in marketing strategy and implementation.

My presentation was specifically tailored to case studies in direct marketing in CEE (Central and Eastern European) countries. The group of managers - from 14 countries - was quite young, highly professional, and very much interested in the practical aspects of how to make such direct response marketing work in the field.

They had already covered different areas of their CRM (Customer Relationship Management) work: data quality & architecture, analytical CRM solutions, marketing communication, principles of direct marketing, campaign execution & measurement.

In our preparation, presentation and discussion of the direct marketing topic for CEE I emphasized and found some valuable aspects that turn out to be keys for success in retail banking marketing in CEE:

1. Disciplined campaign planning & preparation are even more important in order to get all the elements together (list, offer, creative/phone script, budget, provider), as timing is always critical

2. Different languages need not be a barrier to exchange and learning, however team leaders must make an effort to bring the teams together regularly (like my client did) and to have an ongoing tool for communication in between meetings

3. Database availability and quality (even internal data) vary widely across countries and require substantial effort to clean and to maintain, where modern tools help but still require "brain" and personal effort

4. Training and coaching of the local CRM and marketing professionals in learning and using modern direct marketing tools and technology are absolutely necessary; as a result the team has demonstrated, how these efforts deliver high impact for their motivation and ensure profitable campaign outcomes

5. Marketing campaign execution requires strong leadership in order to get all the local and central resources to align for higher results as so much can go wrong - and much will go wrong! All plans are in vain, if there is a lack of follow-up and detailed attention. This seems to be the most important success factor to me.

6. As direct marketing delivers measurable results in retail sales, i.e. number of new loans, number of credit cards, usage of credit cards, up-selling of insurances, cross-promotion of savings products, acquisition of high net-worth clients, etc., these campaigns do have a real impact on the earnings of the bank.

7. The team showed a high amount of creativity in designing and developing campaigns; this shows that motivation arises not only from the final outcome, but also from the thinking and testing of fun and interesting promotions that eventually deliver the intended results.


All together, I learned a lot about dealing with practical problems in the field, fighting with data, technology, processes, quota, and a lot more every day - and still delivering bottom-line results. With their drive and determination for success these up & coming marketers have impressed me very much. I am sure, we will hear from them again.