As one of the primary functional prongs in CRM, the marketing department should use coordinated customer data to advance the sophistication, even the science, of its practices.
Eastman Kodak, Rochester, N.Y., drew customer awareness, perception, satisfaction and purchase information from decades of experience in the traditional photography products market and injected it into marketing decisions surrounding its digital imaging products.
A Marketing Forcefield
When Kodak entered digital imaging in 1997, it needed to pull its strong brand familiarity from a couple of distinct categories — photo processing and film — onto digital still cameras and the splinter categories that go along with the technology.
“To sell the new products, Kodak wanted to get the most out of the marketing investment and strong brand recognition it already had. Kodak knows from experience that putting money into one category positively affects other categories,” said Mike Lotti, Kodak’s director of business research.
Consumer use and satisfaction with established Kodak products nurtures customer awareness of new products and services. Advertising single-use cameras, for instance, produces a sales lift in traditional camera film. Kodak just needed to figure out which existing marketing efforts would sway consumers to purchase its digital cameras.
“The pressure is on to maximize marketing productivity. We want to use measurement to help marketing be productive,” said Tim Ambler, senior fellow in marketing at the London Business School. “Is marketing basically just advertising and promotion and a little bit of market research? Or is it the sourcing and harvesting of inward cash flow? Marketing is the business of bringing in the cash.”
Consumer Decision Making
Kodak knew that its steady branding efforts had made its name ring bells aplenty with consumers. Its own research showed this, WPP research said the same, and Young & Rubicam’s Brand Asset Valuator also confirmed Kodak’s brand strength. But what good was that brand strength to Kodak, especially for selling completely new products?
Kodak mapped its digital products and services against those of its competitors and noted its opportunity to wow consumers — in categories in which Kodak’s market opponents had not snagged significant sales.
Kodak uses conceptual models to keep track of the rub-off effects of marketing activity. “These capture indirect points of return on investment because ROI isn’t as simple a calculation as ‘X’ dollars of media investment produces ‘Y’ dollars of revenue,” Lotti said.
Using a model that linked marketing spend to consumer brand awareness, for example, Kodak recognized that while marketing communications moved consumers’ brand beliefs and familiarity, public relations work didn’t increase familiarity. It wasn’t going to be effective, either, on consumers just thinking about buying a digital camera. Only the prospective buyers with a positive perception of Kodak’s brand — many of them already Kodak customers — would be swayed by public relations.
“Getting in the cash is what marketing is, and we do that by managing the customer’s experience of the brand — their whole experience, not just the advertising, not just the promotions,” Ambler added. “Does it deliver to the customer, the end consumer, those things that they want? Does it give satisfaction? And how does it compete?”
Execution of Investments
Different marketing tactics operate at different points in the cultivation of customers, building up goodwill and the brand’s reputation in the minds of its customers, said Ambler, affirming Kodak’s findings. “That building up of the asset in the heads of people in the real world, that is what has been earned by marketing that hasn’t shown up yet on the P&L account,” he said. “It’s actually more important than what is on the P&L account. Marketing is building brand equity, and if you do that, then profits will take care of themselves.”
Kodak could see this clearly. To change people’s brand beliefs and have greatest impact on their digital camera purchase decision, it had to do a different kind of marketing than when it simply was trying to raise brand awareness.
Marketing efforts don’t remain static, nor do their influences on sales in unadvertised product categories. Smart marketers continually reassess their collected customer data and improve their marketing measurements and connections. “The causal links between branding investments and incremental margin contributions must be calibrated and recalibrated using internal and industry data, including qualitative surveys, marketing pretests and market tracking because the links intend to describe the proven drivers of change,” Lotti said.