Facing Adversity and Change – A Few Days in the Life of a Business Aviation CMO
In this third part of the book we’ve constructed a fictional-yet-realistic storyline that follows a newly hired business aviation OEM CMO as he gets up to speed at his new company and comes to grips with the adversity and change that we describe in Parts I and II. We think this will serve to animate the arguments, concepts and change issues that we’ve laid out so far in this book:
- Welcome to Your New Job – Chapter 12
- Meeting with Your CEO – Chapter 13
- “So What’s It All Mean and What Should We Do About It?” – Chapter 14
- Building the New Performance Tracking Model – Chapter 15
The point of our CMO parable is this: with the right approach to marketing, and marketing processes such as proper performance tracking, it is possible to be get on the road to business aviation success despite the recent changes in both the industry and B2B marketing and selling. It is possible, in other words, to win in the face of adversity.
An important note: our CMO’s story in Chapters 12 through 15 uses some language specific to the world of marketing, such as Brand, Positioning, Leader and Challenger Brands, Sales Propositions and others. Many, perhaps most of these mean pretty much what the reader will think they mean, certainly for anyone with a background in marketing. Nonetheless, each of these words has a precise meaning and context from our perspective, and you’ll see we’ve included a Glossary of Brand and Marketing Terms at the back of the book to make clear what we mean by these terms. And you find more on these subjects at our website, wrg-aviation.com.
Chapter 12 – Welcome to Your New Job
Imagine that you’ve just been appointed as CMO of a good-sized business aviation company; you have the responsibility for the brand’s marketing and sales.
In the course of doing your own due diligence before accepting the job you know that both recent sales and profits are “decent” but that they could and probably should be better (a point of view that your CEO and board no doubt hold).
You further know that the particular aviation market your company serves is very competitive, with a history of new product innovations and introductions that occur on a seemingly regular basis. Your own company’s current product lines are at various stages in their respective life cycles, and you know that there are some new products in fairly early stages on the drawing board. “Let’s be sure we have the specs on these new products ‘right’ before we announce them,” you’ve been told by the CEO.
In fact, the company’s been waiting for you to get settled in before making some final decisions on this new product direction – it wants to make sure the new “marketing and sales guy” is fully on board with the planned new product mix and agrees that “we can sell the hell out of this stuff!”
So, what’s the game plan, Mr. (or Ms.) Chief Marketing Officer?
Let’s have a meeting!
Actually, you have a series of internal meetings: with all of your marketing and sales staff, and the heads of engineering, manufacturing and after sales support; the questions you ask include:
- Let’s make a list of our competitors for each product – what are our relative product (and support) strengths and weaknesses?
- In the areas we compete, are we considered #1 (the Leader), a strong #2 (a potential true Challenger) or a #3 or #4?
- What makes our products different than our competitors? Does this difference make them truly better than the competitors?
- Show me our current Product Sales Propositions and our overall sales/selling strategy, and then let’s look at the last couple of years’ worth of all our sales and communications efforts, including our print advertising, sales brochures, aviation trade show participation (which shows do we go to, and how do we exhibit), web site presence, social media activity and public relations messages.
You also spend time on the shop floor talking to the machinists, electricians, assemblers and quality control folks who build, test, certify and deliver the aviation market products, both current and future, that your company sells. You ask them:
- Is there anything we do when we design and manufacture our products that somehow make them better than our competitors?
- Do you foresee any manufacturing issues with the new products that could keep them from performing as anticipated, or that could interfere with meeting expected delivery schedules?
All of these meetings and questions, of course, are an attempt to get an internal perspective on your current Brand Position: what do your fellow executives, your marketing and sales staff, the workers on the shop floor feel they both know and believe about the current state of the brand that you are now in charge of marketing?
Which is one piece of the puzzle, but you know that the only brand position that truly matters is the one that resides in the mind of your customers and prospects. So you get with your market research manager and say “I want you to hire a firm that specializes in business aviation customer research and insights and work with them to design a study where we find out exactly what our customers think of our company, our products, our after sales support, and also get an assessment of the one-on-one interactions the customers have with us.”
“I’m thinking that we talk to 25 of our good customers, those who always seem to buy from us; 25 customers who have bought from us in the past but haven’t purchased lately, nothing at all over a reasonable sales cycle; and then 25 prospects that we’ve been trying to sell to but who seem locked-in to one of our competitors. Well, you can make the final call on the details, but I need the results like yesterday.”
You don’t get the results “yesterday,” but they do come in faster than you reasonably thought they might (you need to keep your eye on that young and eager research manager) and then you spend a very long three day holiday weekend doing nothing but analyzing everything you’ve learned both internally and through the customer and prospect research study.
One more meeting to schedule . . .
Tuesday morning, back in the office, you check in with your CEO’s admin to get an hour of his time scheduled as soon as convenient with him. You have some critical issues to discuss, most important of which is a perspective, and some recommendations, on the state of your company’s brand position . . .
Chapter 13 – Meeting With Your CEO
Cup of coffee in hand, you briefly review with your boss the background and basics for the analysis and recommendations you’re about to show him: internal product and business assessments you’ve done with your marketing and sales staff, meeting with your executive counterparts in engineering, manufacturing and after-sales service and support, the conversations you had with the shop floor workers, the people who make and ship your company’s aviation products.
You also commissioned market research: the firm your research manager hired talked to a mix of current, repeat customers; customers from the past who haven’t purchased anything from you in a while; and targeted prospective customers who buy from your competition.
You emphasize that part of this, obvious to the CEO, is to fully understand competitive strengths and weaknesses with existing products, the status of new products in various stages of design and pre-production, and an overall assessment of the way your company has in the past – prior to your arrival – executed its marketing and sales functions, which is, of course, your key responsibility.
But you also lay out the critical importance of understanding the current brand position that your company as a whole has, as well as the current product image positions that your key revenue generating products hold. (These concepts are somewhat less familiar to the CEO, an engineer by training and background). You emphasize that the position of your company’s brand – relative to your competitor’s brands – that is held by your customers and prospects colors everything they know and think about your company and competitors.
This is key for existing products, but at least those products have their own histories and performance “facts” that add substance to the overall brand image, but the new products that will be coming out will lack this track record and will need to have a clear, relevant, believable and differentiated position crafted for each of them.
The sum of this process, you assure him, is to clearly understand where your brand and its products reside today in your customers’ minds, and then, if necessary, work to evolve the brand’s position for the future to help insure the continued sales success of current products as well as successfully introduce the new products.
“Well,” the CEO replies, “You’re on track that I want to see strong continued sales for our products we’re shipping today, and we better have some great new products coming soon that the market wants and needs – that’s your job.”
“So proceed – what did you find, what’s your analysis, and what’s your recommended plan?”
Your summary outline of what you found internally –
Marketing and sales staff (your direct reports):
- While the sales effort has a strong organization behind it, the marketing function has traditionally had little input to new product design; the company has an engineering and technical orientation rather than marketing.
- Current product line tends to be on the higher end of the price scale relative to competition; there is a fear within the sales force that their products perceived quality and technical edge – which supports the higher pricing – might be eroding somewhat due to competitor advances. If this continues price reduction/discounting may need to be considered.
- Advertising budgets have traditionally been solid in support of sales, but the company has been slow to move into the digital arena: the company very much needs a new website, better online CRM, and needs to figure out how (and even if) to use social media in an effective manner.
- Tend to “over-engineer” products to tighter specs than truly necessary.
- Which leads to a higher quality product – which has been advertised as such – but does add cost to manufacturing which in turn drives a higher pricing structure needed to hit the profit goals.
- Current production lines “couldn’t be running smoother.”
- For the new products on the drawing board there will be some new processes required, and new tooling, but doesn’t anticipate any production or delivery issues.
- Everyone out in the production area talks proudly about maintaining high quality and precision standards
- However . . . the just-in-time parts and materials logistics flow can sometimes be a problem: “we do occasionally have some down time while we’re waiting for ordered parts or materials to be delivered to the plant.”
What you learned through your customer research –
Current, repeat customers:
- Have a real sense of loyalty to your company and its products, which are seen as high quality, dependable, backed by strong service and support; the products deliver: “they’re just really good at doing what they’re supposed to do.”
- But, two issues bubbled up:
- Prices seem to be “creeping” up; customers have been approached with aggressive price offers from competitors.
- Recently a few senior sales and service people (“the face of your company, as far as I’m concerned”) have left for one reason or another, and the question is “who is going to replace them?”
Previous customers who haven’t purchased from us in a while:
- Fell into three distinct camps –
- Some are price buyers and didn’t hesitate to switch when offered a better deal on a product that met their minimum spec requirements.
- Some said they’d consider us “next time; make sure your sales guys stay in touch and put me on your email list for your newsletters and PR product update news . . .”
- Some said that we have fallen behind our competitors’ products: “Sorry to say but you guys are not keeping pace in technology.”
Non-customers who have been targeted as good prospects:
- “Who are you? Don’t really know that much about you.”
- “My impression is that you guys are somewhat old-fashioned, old fuddy-duddies, with old products and old technology.”
- “Actually, we did do an extensive analysis of your products versus your competition the last time we were in the market, and we found your overall mix of quality, price and value to be at a disadvantage. So we didn’t buy you.”
Your CEO: “Well, that’s all pretty damn interesting, and some of it is good, but a lot of it is disturbing. Let’s take a five minute break before you tell me what it all means and what we’re going to do about it.”
Chapter 14 – “So What’s It All Mean and What Should We Do About It?”
After the break you and your CEO are back in his conference room and he says, “Okay, again that was all interesting, some was good and part of it scares me. So what’s it all mean and what should we do about it?”
You start with the company’s current products, and describe how they fall into two categories of brands:
First (good news) you do have what we call Leadership brands:
- “Two of our current products are recognized as category Leaders in sales, market share, and awareness within the target audience; this recognition is both internal and external.
- “These are highly reliable, somewhat higher priced than competition but very good at cost of ownership (operating costs). They are associated with excellent support, and perceived to offer above average value. These products have also been supported with an advertising program that has been recognized within the industry as ‘classy, dignified, straightforward and very informative’.
- “However . . . these products need innovation, and if we can’t (truly) innovate then at the very least we must upgrade these products with new design and the leading edge of the relevant technologies in order to stay ahead of our closest challenging competitor, one that recently announced plans for a new and exciting product line that takes dead aim on our product.”
And you have what we characterize as “Other” brands:
- “The rest of our current brands are either #3 or #4 in market share in their respective product categories.
- “These products are well known, as they’ve been around forever, and are seen as reliable workhorses. They don’t, however, perform at the level of the category leaders – we have older technology – and therefore we sell them at a discount to the leaders; this lower price isn’t bad financially, though, since we still make a good profit because we haven’t really invested in these products lately and don’t have that ROI concern to deal with. In essence they’ve become cash cows for us, and they can probably continue to play that role for the next five years, but they’ll pretty much truly become obsolete after that, with the only sales coming from an established (and shrinking) base that needs replacement parts.”
You move on to the two new products in development, which you explain to your boss are Challenger brands, as they will be competing against well-established leaders in the two categories these products will be fighting for sales. You spend a few minutes explaining just exactly what that means (see Glossary) and then you launch into your analysis:
“Well, I have good news, and bad.”
Boss: “Bad news first.”
Again, we have two Challenger brands; let’s look at the first:
- “In simplest terms, this new product in its current design just doesn’t bring enough “newness” to really go head to head against the market leader; it would be a good product, no doubt, and meet the category requirements but it would be “me-too” and have to compete on price versus the leader and that (no doubt) would probably prevent us from hitting our profit goals.
- “At this point I recommend taking another hard look at the design specs for the product before moving on to building the prototype. I have some ideas that, based on a very preliminary discussion with Jim in engineering, might both be doable and will give us the significant advantage over the lead brand that we’re looking for.”
The second new product (and the good news):
- “Wow, I think this one can be a home run! It offers clear advantages over the current category leader, and clear differentiation on factors and benefits that really matter to the buyer. In fact, this product is such a clear advance that it will allow us to make an entirely new and persuasive argument to the customer (we call that ‘shifting the debate’ in our marketing speak). And the new design aesthetic is part of the advantage, which allows you to just look at the product and see ‘new, different and better!’
- “But we’re also going to need a completely new advertising approach, different in tone and attitude than what this company has traditionally done. It needs to be more aggressive, and relatively speaking, more ‘in your face’ than is usually found in this product category. Actually, instead of aggressive let’s use the word ‘energetic’: we need this more energetic approach to match the ambitious goals we have for this new product, which we’re betting on to overtake a well-entrenched leader and claim the top market share position.”
- “Now, to jump up to the 30,000 foot level, I’m really talking about revamping our overall brand position, how we talk about our company and products, one that will both reflect and support these Leadership and Challenger positions I’ve been talking about. I’ve tasked our ad agency with doing some early work on this, and once we’ve settled these product issues I’ve raised – the business decisions come before the communications strategy, of course – I’ll be back to review that issue with you.”
- “Let me repeat that, because it is critical to our success going forward: our current brand position, what our customers think of us, doesn’t mesh with where you want this company to go – we must craft a new brand positioning, and it must be supported with a new tool box of communications tactics, if you will.”
The CEO is quiet for a few moments, then says, “I’ll have my assistant set up a meeting with the executive team this afternoon or no later than tomorrow morning, and you’ll go over all of this with them – we have some decisions to make, and I want everyone on board.”
“Very good. Also, very quickly, a few other things:
- “We need to name some new key customer contact people, as you’ll remember that came up as a possible sore point in our research that we need to deal with. I’ve got some ideas for that, good experienced people, but we also need to start bringing along younger people, people who are in their later 20’s, early 30’s who have been with us a few years in junior roles. The group that’s called Millennials is what I’m referring to, and more and more of them are getting positions of importance at our customers’ firms – we need to be in step.
- “And, related to this, we need to revamp our digital communications, starting with our years-old web site and CRM system. Also, we really need to figure out our social media use in terms of what can be effective for us to help our brand. This is the kind of world our younger employees, and their customer counterparts, live in. The really do look at the world differently than the Baby Boomers. Again, this is something that I’ll be back to you about on another day, but it’s a coming change that’s really going to affect us inside and outside of the company.”
- “Last, I want you to know that we’ll be setting up a marketing performance tracking model in order for us to both monitor progress toward our business goals and measure ROI on our marketing, advertising and customer relations efforts.” The CEO nods at this last comment and says, “Great, I definitely want to see that, so let me know when it’s ready to go.”
Chapter 15 – Building Your New Performance Tracking Model
“That went pretty well, I think, so now all I have to do is deliver on everything I promised my boss” you muse to yourself as you head back to your office from the CEO’s conference room. “First order of business is to gather my team, brief them on the meeting and get everyone rolling; we’ve got a lot to do.”
A long afternoon later, as your marketing group leaves your office with their assignments in hand, you spend a few minutes reviewing the key resolutions and to-dos before heading home for the day:
As a group you decided to focus on building the performance tracking model around two key programs: first, one of the company’s true Leadership products that will continue to be a mainstay of your company’s revenues and profits, and second the new Challenger products that you (and your boss, the board, the stockholders, etc.) have full expectations will be a winner and will allow the company to aggressively expand in a profitable new direction. Once the model is up and running with these two huge programs you can fold in your “other” products as quickly as you can at that point
The three objectives of the performance tracking model were clarified:
First and foremost is the need to measure progress toward achieving the business objectives and the end results (or “hard” results) that stem directly from the business objectives for the innovative upgrades to your Leadership product and the new Challenger product – this is what everyone in the C-suite will be looking at.
Second, and essential to your marketing group, is the need to show the contribution the marketing and selling activities make to achieving the end business results, by way of the intermediate results (or “soft” results) that you’ll set for those specific functional activities. Critically, this is where you’ll show the ROI – the performance results and contributions – that marketing makes to the business bottom line.
These first two objectives will measure the results of the program, while the third objective is to use the data model as much as possible for predictive tasks, such as “what will it take in the future in terms of monetary resources to accomplish X? Or, on the flip side, “If I only have Y resources, what can I legitimately expect to accomplish in the marketplace?”
And of course you reviewed this schematic to give the 30,000′ overview on the approach:
With all this in mind, your team collaboratively created the following chart, using the critical business objectives and end (hard) objectives that your company has set; your marketing team’s responsibility, of course, is the marketing process and the intermediate (soft) objectives:
|Leadership brand||Challenger brand|
|Business objective||Maintain and grow leadership in this product category: #1 in share; revenue; reputation||Currently 3 major and 3 other players: objective to become strong #2 in three years as measured by share; revenue; reputation|
|Marketing process||Continue category leading spending on marcom, PR, trade shows, social media. Be sensitive to how your audience receives marketing information and flex your spend accordingly; think mobile devices for digital media||Set aggressive spend and activity levels at 1.5X level of current #1 brand in the category. Research competitors’ activities to establish benchmark; differentiate your brand via USP and messaging delivery|
|Intermediate (soft) objectives||Design new website to be best-in-class, driving 50% increase in visitors/web traffic; website and social media, PR, etc. must be in sync in timing of announcements, promotions, etc. Be sure website is mobile responsive
Emphasize new category leading innovations;
Implement new CRM to better track sales prospects and revenue opportunities; track initial contact point, e.g. Twitter, Facebook, PR, advert, trade show to establish most effective contact channel and messaging
|Rapid increase in new product TOM awareness of 30%;
Prospects clearly understand key product features and value; USP can drive message
Inclusion in “top 3” purchase consideration set;
Rapid growth in web site visits, info requests, blog followers to match the average of the top 3 (current) brands in the category; metrics should be in place prior to starting campaigns
|End (hard) objectives||Grow market share from 45% to 50% (measured in $ revenue); be sure to inflation adjust results||Category market share goals:
Year 1 – 5%
Year 2 – 15%
Year 3 – 25%
(measured in units sold)
Set aggressive goals – if your brand is truly a strong Challenger, these can be achieved
|ROI||Integration of customer and prospect specific sales and CRM data with tracking tools (below), measured over time, to assess marketing process results impact on end (hard) objectives||=> Same|
A subset of this process is using the SMART goal setting tool, currently popular with HR departments for setting employee annual performance review goals, it also lends itself nicely to implementation of marketing programs. Goals should be: S = Specific; M = Measurable; A = Achievable; R = Relevant; T = Time bound. With each SMART goal establish a Task, set an Expected Completion Date; track the Actual Completion Date. Using this system can serve as a checklist for keeping on track as well as an early indicator of problematic areas that might impact timely completion.
One of the most important of these tasks, certainly, is the collection of the relevant measurement data going back at least three years, and ideally five years or more. (For a refresher on this, see the discussion on the different variables one may need in Chapter 7.)
And the details go on: specific staffers who have responsibility for customer research, advertising – both traditional and digital – and data collection and analysis discussed using specific tools for their individual assignments; some examples include:
- Web site stats: Google Analytics
- Omnichannel digital tracking: Bitly online tracking tools, using Branded Short Domain (BSD) to track/measure across all digital and online properties (website, blog, Twitter, Facebook, etc.)
- CRM: we will need a new, more sophisticated (and hopefully easier to use!) CRM package: some candidates will be Hubspot, Microsoft Dynamics, and Salesforce.com.
- Social media management: Buffer or Hootsuite
- Customer data:
- Customer and prospect awareness, attitude and use data input
- Customer surveys (trend tracking) over time
- After-sale opinion surveys (purchase process satisfaction; value perspective; Net Promoter Score measure)
- ROI modeling software: SPSS Modeling and SPSS Statistics; these statistical software packages will also be used for the predictive capability you’re looking for
All of this will take a while to create, and the time and effort to model the process will be neither short nor easy, but the process is started, with firm commitments from all who matter, and that’s what counts for this undertaking. You realize this may be the most important thing you do, as it will give you the data and insights you’ll need to confidently discuss the marketing department’s real impact on the business with the CEO and CFO, and gain respect from your peers in engineering and manufacturing.
Well, that’s enough for today, you think; “We’ve got a good plan, we’ve got the support of management and most important we’ve got great products (Leadership and Challenger), and a very good (but maybe not optimal?) current Brand Position.
“Which reminds me – I told the boss I think we need to move to a new Brand Positioning Objective in the future that will better help us achieve longer term goals. Well, that’s for tomorrow; it’s late, so let’s head for home.”