Meaningful Marketing

A. Introduction

I have been tasked to keynote this big event by providing a backgrounder on the Philippine Marketing Association’s theme for 2010 “Marketing as a Growth Accelerator”.

I am using the topic “Marketing with Meaning” instead because the concept, a framework originally presented by Bob Glbreath, is at the heart of the theme “Marketing as a Growth Accelerator.”

“When your marketing is meaningful, the marketing itself adds value to people’s lives, whether or not they immediately buy what you’re selling.(Bob Gilbreath, 2010)

Marketing as a growth accelerator can only have substance if it yields something that is meaningful – to people, to a community, to a country or to the world.

Similarly, a performance-driven sales result will have to be delivered by the sales team and the organization in a manner that substantiates, not downgrades, the social value of that result.

The co-relation between a performance-driven sales result and a meaningful marketing may not immediately present itself in the short term. The relationship becomes apparent only over a long period of time.

Colins and Poras and Kaplan and Nortonhave investigated companies practicing meaningful marketing. Their findings suggest that companies practicing meaningful marketing have endured the test of time, better than other companies.

I was inspired to prepare this keynote using this topic after my meeting with Kate Palana, Public Affairs and Communications Director of Ariva. From what I gathered, Ariva, a young company with young and enterprising owners, believes in a corporate philosophy that directly connects corporate initiatives to social benefits.

For every event Ariva organizes, a certain amount from the gross is earmarked to benefit poor students. As they organize more events, more poor but deserving students get to participate in the proceeds. What I find amazing about this corporate philosophy is that the amount set aside is taken not from the net but from the gross.

This is the first time I have heard of such a practice. Large companies allocate a certain amount taken from reserves and put that amount in a trust through a foundation. From the interest of that trust fund, social initiatives are undertaken. It is hardly a commitment.

Here is a company, right here in this convention hall that practices marketing with meaning. While we cannot at this time compare Ariva with great companies as described by Colins and Poras because it is a young company, it practices the important elements that these great companies have implemented.

I will be talking about three inter-related subjects: Marketing with Meaning, Marketing as a Growth Accelerator, and Performance-Driven Marketing.

B. Marketing with Meaning

B1. Sharing a Place (Starbucks)

Do you have third place? What is your third place? My third place is Starbucks. I spend my first hour of the day outside of my house in Starbucks.

I have come to develop that affinity with Starbucks for some good reasons. Whenever lights were down because of brownout, there was Starbucks. You can charge all your cell phones and gadgets, and that is ok.

Whenever I needed to work on a report and going back to the office was not option, there was Starbucks. You can work the whole day in Starbucks buying just one cup of coffee, and that is ok.

In my frequented outlets, I am called by my first name. It has been a partner to me through deadlines, marathon meetings, and many work challenges.

Billy Coburn, in his book “Cafés of community: the Starbucks principle” describes Starbucks as a legitimate third place.

Billy Coburn writes that “Home is a good thing. Home for the holidays. But home is not the only thing. In fact, sometimes family closeness gets just a little too close, especially during the holidays. After a few days of togetherness — right about now, three days after Christmas — many of us would probably welcome a little time away from home.”

What is second place? Coburn says “That second place, home being the first place, is usually work. At work we form friendships, socialize and spend a considerable chunk of the week. It’s a place where we practice our vocation and participate in a community of colleagues. But [Coburn argues] home and work are not enough. Sometimes we need to get away from work. We need a third place.

That third place to me is Starbucks. According to Coburn, No one understands this better than Howard Schultz, founder and CEO of Starbucks. Schultz founded Starbucks on the premise that Americans are missing a third place in their lives — a place that his coffeehouses can fill. He understood that in America, as well as in Italy, it’s not about coffee, it’s about connection. That’s the Starbucks Principle. And for many, it seems to be working.”

Schultz found a business niche. It is a niche that is anchored on creating value for people, providing customers with the space that they need on a day to day basis. That is marketing with meaning.

To many Filipinos, third place may be the mall. I will not argue against that. The mall that the Henry Sy’s and the John Gokongwei’s established are virtual third places – where you can dine, buy RTWs, buy groceries, pass the time and hear mass. It presents a condition that positively alters lifestyle and behavior of people.

In the mall, people queue. People follow rules. People throw their trash in the trash can. People have fun. People share.

B2. Sharing Knowledge (Wikipedia).

Do you remember the “I love you virus”. That Filipino invention created so much disorder worldwide that the student who invented that debilitating virus is now a top notch programmer outside the Philippines.

From my recollection, the student wanted his revenge for his failure to get free access to the internet. In fact, it was quite expensive at that time. In response, he used his genius to express his anger. He developed the virus that cracked millions of computers around the world.

He knew how vulnerable people were with the words “I love you.” With what he learned from school, he unleashed the deadly virus. With these combination, he altered the life and resources of many people and institutions.

Here is a guy with the same purpose of getting things for free. However, he used a different approach, a kinder approach. [WIKIVIDEO CLIP].

Writer C Everett Koop, once wrote “Life affords no greater responsibility, no greater privilege than the raising of the next generation.” To Jimmy Wales, sharing knowledge to the internet generation is a mission, a privilege.

I can’t find any greater mission (save for what we read in Matthew 28) than to share knowledge to the next generation. That is the ultimate of marketing with meaning.

B3. Sharing Wealth (O&CLP).

We talked about sharing places (Starbucks), and sharing knowledge (Wikipedia). This time, we will talk about sharing wealth. The Greenhills Shopping Center, in particular.

What is unique about Greenhills Shopping Center? First, it is the most expensive retail space in the Philippines. No other shopping center can match the cost of retail space in Greenhills.

Second, it put the country in the international shopping map with its world-class pearls and reputation as a value-shopping mecca. One time, while walking along the side of Glorietta, three foreigners approached me and asked me what the general direction was towards Greenhills was.

I clarified if they were looking for Greenbelt, not Greenhills. One of the foreigners said, that place with the pearls. So I talked to the taxi driver and directed him towards Greenhills.

Third, you will find the wealthiest, hardworking Muslim traders in Greenhills, driving fancy cars like Mercedez Benzes and Expeditions and living and mansions in and around Greenhills.

The mother company, Ortigas & Company, created the environment for these traders to prosper. OCLP supported these traders’ aspirations by promoting oneness, respecting tradition and religion, and advancing equal opportunity to all business people. Sharing wealth. That is marketing with meaning.

B4. Sharing the Country.

Tony Fernandes, founder and president of Air Asia spoke about his struggle to reinvent travel within Asia particularly destinations to lesser known cities and places.

His company was just about to cross over the growing pains of starting business when the bombings in Bali happened some years back. Tourism was at a standstill which affected tourism traffic from Malaysia and other Asian countries to Bali.

In a bold move, he talked to the different hotels in Bali. Together they strategized. From that planning session, they agreed to offer 10,000 seats and rooms for free.

They wanted to test if the tourism drought was indeed due to tourists’ concern for safety. When the offer was announced, the 10,000 seats and rooms were taken in less than one week. Thus started the recovery of Bali as a tourist destination. That is truly marketing with meaning.

Cebu Pacific air redefined travel in and from the Philippines. A domestic seat for P99. A foreign destination seat for P999. How low and how courageous can one get to sell.

That marketing strategy expanded travel from and within the Philippines. The country is enjoying a boom in domestic tourism. Our young workers and executives are now able to see much of the country and some parts of the world.

My employees, including those who have been on the job for only a year, would take time off to go Mindoro, Cagayan de Oro, Palawan and Bohol. Now, they have started going to other Asean countries such as Vietnam. I believe that Cebu Pacific’s corporate and marketing philosophy made this possible. That is marketing with meaning.

C. Performance Driven Sales Result

That brings me to the topic on performance driven sales result. For sales to be performance driven, it must use effective sales techniques and strategies. For performance to be sustainable, sales activities must operate in a marketing system that is meaningful… and nurturing.

Have you ever heard of the movie Glengarry Glen Ross. Glengarry Glen Ross is a 1992 independent dramedy film. Stars included Al Pacino, Ed Harris, Alan Arkin, Kevin Spacey, Alec Bladwin and Jonathan Pryce. It is about selling.

The film depicts two days in the lives of four real estate agents and how they become desperate when the corporate office sent a representative to "motivate" them by announcing that, in one week, all except the top two salesmen will be fired.

At the same time, the company announced that they developed the ideal prospect list, called Glengarry Glen Ross, that would definitely energize sales and give everyone the chance to sell more properties.

This ideal list was to be given only to the top two sellers. The rest of them would be fired. You can imagine the anxiety and apprehension after that announcement.

One agent tried to bribe the manager to give him some names from the Glengarry list. Another tried to threaten the manager for some names in the list. Another tried to appeal to the manager’s emotion. No way, says the manager.

Somebody proposed to steal the list, a move that seemed to have been the only option at that time for the agents. Some agreed to take it as an option. One did not.

As the salesmen reported to work the following day, they found that the office had been burglarized and the Glengarry leads had been stolen. What resulted presented the bad side of performance driven selling.

This is not the kind of performance driver that we envision. It departs from the corporate philosophy of meaningful marketing. It is old stuff. Part of legacy marketing. It creates unnecessary tension. It destroys lives.

Sessions today and tomorrow shall unveil best practices and effective techniques to drive sales performance.

• New sales concepts, latest ideas and techniques for selling in today's challenging markets

• Achieve Success Through Collaboration: Account vs. Product/Market Focus… How marketing mix elements tie in to the sales process

• Learn how to utilize your selling resources more strategically to drive sales

• Gain insight into new ways to link your strategy and sales compensation plans, improve marketing plan, and increase sales performance

Performance driven sales results, as they are practiced today in progressive sales organizations, are actually metric driven using a model that combines lagging and leading indicators. They combine technology and people skills, outcomes and output measures, and short and long term goals.

Credit card companies and consumer financing companies were among the early adopters of performance driven sales results using a combination of technology and people skills.

As a result, the number of credit card holders have expanded, sales of consumer durables have exploded, and the turnover of traditionally slow moving products such as cars and real estate have increased.

I remember some 15 years ago, I received a letter from Citibank saying that I have been pre-approved for a card with a credit limit of P50,000. At that time, Citibank was a new player competing against the more established credit card companies. In five years, Citibank became the dominant card company, a position that I believe it still holds today.

How does that work. Using past data, the bank created a model that defines the profile of good credit risk and bad credit risk. They ran that model on a database of depositors, executives, and entrepreneurs. That process created a short list of prospects around which an aggressive sales campaign was mounted.

The same technology is now used in many other industries and many other functions in the selling process – in campaign management, churn management, loyalty programs, agent selection process, agent promotion programs, and many more.

Companies and industries that have innovated and implemented performance driven marketing and sales have expanded and have been profitable even during the crisis.

Using marketing as a model for corporate growth and profitability is gaining popularity. As marketing and sales professionals, it becomes part of our responsibility to discern the importance of this approach and to promote to management the value of creating an enterprise discipline that is anchored on marketing principles.

D. Marketing as Growth Accelerator

Yoram Wind, professor at the Wharton School of Business, reported that at the 2003 Chief Marketing Officer Summit (CMO) Summit in the U.S., marketing leaders from diverse firms came up with a manifesto stressing that marketing should be an engine of growth and profitability for the organization.

The manifesto begins with the premise that marketing has the discipline to link insights from the market with the strategies of the firm and to drive the creation of value by developing relationships with customers.

The manifesto states that marketing should create and build leadership brands that consumers love and that marketing should lead the continued transformation of the company.

A McKinsey study presented at the Summit noted three primary opportunities for driving growth:

1. Integrating customer insights more broadly into business functions,
2. Integrating business strategies with brand strategies, and
3. Integrating marketing and go-to-market execution.

The same study showed the specific ways by which marketing perspectives can serve as an engine for growth, these are:

1. Creating market-driven vision and value proposition,
2. Using market insights to drive innovation,
3. Leveraging technology and marketing to create convergence, and
4. Rethinking customer experience and relationships.

As reported, Marketing, which is at the interface between the organization and the environment, can provide new opportunities for value creation and growth and that it should be a concern to the entire organization.

Marketing provides the pathway by identifying opportunities to serve unmet needs of current customers or new customers for the company’s current and new products and services. A focus on growth requires an integrated approach, cutting across the organizational functions and activities.

Marketing as a growth accelerator is Philippine Marketing Association’s theme for 2010. All activities will be designed around this theme. There are actually several, let me mention some of theme:

1. National Marketing Conference – a must-attend conference that will showcase the important trends in marketing to be presented by thought leaders and exciting speakers, both local and international. Scheduled on June 24 and 25 at Hotel Sofitel. Expected attendance is about 1,000 participants.

2. National Marketing Month including Strategic Marketing – declared as national marketing month is the month of July. The major event is Strategic Marketing where we share with students the latest trends in marketing. To be held in four cities. In NCR on July 3 at Aliw Theater with about 2,500 students. In Cebu on September 13, in Davao on September 17 and in Baguio on November 26.

3. Agora Conference in October and the Agora Awards in November.

4. Chapter activities in 14 Cities.