Marketing departments revamp to suit consumers

New customer groups more likely to be defined by 'mom' than product lines

The customer has always been king, but some forward-thinking marketers are taking that to the extreme by electing Joe Shmoe head of their internal organizational configuration.

Nancy Helstab, managing director of Toronto-based marketing consultancy BrandEdge, sees a definite movement toward ‘consumercentric’ structures and says that, like most trends, it’s being accelerated by a tough economy. ‘Revenues are flattening and other than doing acquisitions, there’s no silver bullet,’ she says. ‘Everyone’s rolling up their sleeves and saying, ‘We have to do more with what we have in the businesses we’re in.”

For many firms, the secret to doing more with what you have is to divide resources around consumer segments, as opposed to product lines, with the goal of getting a bigger share of wallet.

Bell Canada did just that last year. The telcom specifically assigned departments to look after the consumer, small business, medium business and enterprise targets. And in its consumer divisions, like Mobility, segmentation has become even more pronounced, says John Hillis, director of market development at Bell.

One of the most obvious examples is the introduction of Bell Mobility’s youth-oriented Solo group. Hillis says its conception made sense, because young people have different attitudes and behaviours when it comes to cellphone usage. The advantage of Solo is that it makes marketing programs both more effective and efficient, he adds.

‘Sometimes carving out a specific group and giving it a real focus and horsepower makes you quicker from a marketing perspective. By listening to customers and having a focused group, you have the critical mass to deliver. When it’s part of the overall marketing group, it doesn’t always get the attention it deserves, and you certainly don’t get people who can really become the voice of the customer.’

Hillis points to Bell Solo’s World Wrestling Entertainment mobile, which alerts users about front-of-the-line tickets, as well as up-to-date info about the sport. ‘That was something that, had we not been really in tune with key drivers, we might have glossed over, and with that product we’ve seen incredible pickup,’ says Hillis. ‘We doubled our business case in the first two quarters.’

In fact, Solo has performed so well, that Bell Mobility has decided to organize around other consumer targets, such as women and ethnic. This Mother’s Day, for example, the firm is running a promotion offering a free subscription to Canadian Living with the purchase of a cellphone. ‘Without a group looking at a [particular customer base], you may not have the time to strike a partnership like that,’ he adds.

While Bell has made significant strides in this regard recently, the banks have led the charge, with the likes of Scotiabank and BMO having realigned their internal marketing departments several years ago, in an effort to better address their customers.

Scotiabank still has business lines devoted to product, but they have indeed become more centralized, according to VP brand and marketing management Rick White. In other words, all things related to borrowing are under one department, as are all things related to investment. The marketing department then works with both divisions, to ‘develop action plans in the marketplace that are simple to understand and that are customercentric.’

Adds White, ‘Whereas five years ago we would have had eight different groups for credit cards, loans, mortgages, etc., now we have two groups we’re working with. This is one way we have centralized and we get a better understanding of how customers use products over time, and also which products should get bundled together, such as a credit card and a line of credit.’

Similar undertakings have gone on at Toronto-based BMO. Chief marketing officer Michael Beckerman says that on the retail side, where the financial firm does business with six million households, such a move has been essential to delivering consistent advertising messages.

‘Within the personal segment, we have customer groups that are defined by attitudes and behaviours and demographic and psychographic information,’ he says. ‘I think where a lot of organizations make a mistake is that they market individual products to their client base, and if you do that, you probably end up with mediocre product penetrations, brand fragmentation and you’re certainly not developing meaningful holistic relationships with clients or customers.’

BMO has been able to avoid ‘brand fragmentation’ through the establishment of a senior department that provides brand strategy and planning for all sub-brands – BMO InvestorLine, BMO Nesbitt Burns and BMO Bank of Montreal – in order to ‘ensure a consistent and seamless experience across channels, and as appropriate, brands,’ says Beckerman.

This approach allows BMO to approach the consumer with a single, focused message at any given time, avoiding confusion and duplication in the marketplace.

As an example, Beckerman points to the current campaign for its Mosaik MasterCard, which has recently partnered with Air Miles and West Jet.

‘As an organization, we can prioritize to the appropriate customer segment, that this is the most important message they will receive from our organization in the next 90 days,’ he says. ‘We recognize an inherent customer benefit, and we will not have any incremental noise out in the marketplace.’

Greg Barber, Mississauga, Ont.-based head of marketing at the home entertainment division of Microsoft Canada, would agree that having a single, overseeing marketing department gets the most out of limited resources and budgets. In fact, such a setup has permitted the Canadian subsidiary to focus on a new customer – moms.

‘In larger subsidiaries, like the U.S., you have product managers who live and die for their products and they would never cut 25% of their budget to do [what we have],’ explains Barber. ‘But when you have one guy to head up marketing for all PC products, you can trade off and direct dollars and take accountability for those results.’

That’s exactly what Barber did. Two years ago, he decided to zero in on the female segment and introduced an online lifestyle magazine, a Canadian initiative called Microsoft Home (www.microsoft.ca/home), to better address the new target.

‘Our legacy is marketing to the enthused and that means tons of information on the Web site – they’ll self serve in that market. That will never change, but if you’re going to become lifestyle and mass, you need to go beyond the bulls-eye of the marketplace and expand to those who are not interested in the plumbing, but the benefits of the experience.’

Thus, the site – which was created by Toronto-based shop iPrimate and accounts for one-third to half the traffic on Microsoft.ca at any given time – encompasses topics such as home spa treatments and how to protect oneself from carpal tunnel syndrome.

‘We had to absolutely make tradeoffs between product marketing and demand marketing – we’ve done far less retail promotion and marketing in consumer products in order to direct dollars and human resources to lifestyle-oriented marketing,’ says Barber, who admits this was a risk. ‘If it didn’t work, you’d be talking to someone else.’

In the end, despite not investing directly on consumer products, the Canadian contingent has outperformed its counterparts elsewhere in the world, says Barber. ‘The hard part is directly saying that because we spent dollars here, we sold more of a certain product. It’s difficult, but year after year the Canadian subsidiary overachieves.’

Power to the staff

In a truly consumercentric model, more power should be in the hands of staff on the ground level. So says Nancy Helstab, managing director of Toronto-based marketing consultancy BrandEdge.

‘In this world of customercentric, the customer is at the top, and the front line is next,’ she says. ‘But in many organizations it’s still very much head office directing and pushing a lot of its products.’

Helstab says the barter Web site eBay has done a superb job at putting the customer first. And no wonder – the company’s product is literally created by its community. Says Daryl Aitken, head of marketing at the Canadian operation, ‘All of the transactions are produced by our community of users, all of the merchandise is listed by sellers and bidding is done by buyers – our role is to make that as fast and easy and safe as possible.’

In order to achieve that, eBay remains in close contact with its users. In fact, every eBay office has a department that monitors and participates on chat boards and delivers a weekly barometer of customer feedback to the entire staff. Meanwhile a program called ‘Voices’ enables eBay to consult a panel of sellers and buyers regularly, and last year ‘On the Road,’ an event that travels across Canada educating consumers about the best ways to use the site, was introduced.

‘All of our insights are evaluated on that community of users, [as is] every product change we make [and] every marketing message we produce,’ says Aitken. This philosophy appears effective; the San Jose, Calif.-based firm recently reported that its first-quarter sales rose 59% to US$756.2 million.

Still, it’s not just the eBays of the world that are enhancing dialogue with the consumer. Scotiabank has been handing more resources to its personal bankers in an effort to do the same. Stephen Gaskin, VP service experience, says most of the ‘change’ has centred on employee engagement.

Among the elements introduced were an annual survey that monitors employee satisfaction (last year 89% of staff considered the bank a great place to work); ‘Team Voice’ which enables employees to communicate directly with senior management; and an employee recognition program called ‘Scotia Applause.’

So far, these efforts have worked for the financial institution. According to Tarrytown, N.J.-based Synovate, an independent firm that ranks customer service among the banks, Scotiabank led the industry in 2003.

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ldinnocenzo@brunico.com