Case Study: Developing a Culture to Run Marketing As a Business

As 2010 approached, SAP found itself in a critical position. The competition was evolving to be leaner and more targeted. Customers were becoming more knowledgeable, demanding and price sensitive. SAP’s image was quickly becoming outdated, and there was a growing rift between employees and upper management that threatened to pull the organization apart. A new case study by Matthew Quint of the Center on Global Brand Leadership, Run Marketing as a Business: The Transformation of SAP Marketing, is a two-part study that delves into how SAP’s leadership worked to reinvigorate the company and how SAP Marketing evolved into a department focused on culture and ROI-driven results.

The financial crisis of 2008 impacted SAP and other enterprise resource planning providers in three major ways: it sharply contracted IT investments, it changed the ways that companies evaluated and purchased ERP services, and spawned a powerful new competitor in Software-as-a-Service (SaaS). Spencer Osborn from Ogilvy notes, “…There is an increasing trend of ‘prosumer’ purchasing behavior in the business IT sector. Google, Apple, and others brought simplicity to the IT interface and professionals now expect the same for business software.” The business was becoming more and more complex, and traditional methods of product management and marketing were no longer applicable.

Amidst these business and consumer challenges, SAP’s Board brought in new co-CEO’s, Jim Hagemann Snabe and Bill McDermott, who quickly set ambitious goals for SAP: generate a revenue target of €20B, create an operating margin of 35%, and reach 1 billion people with SAP technology and services.

The CEO’s broke from tradition and focused on expanded SAP’s portfolio of offerings through mergers and acquisitions. Simultaneously, SAP Marketing developed a strategy to transform SAP’s image to a more innovative, dynamic and approachable company. In 2011, Jonathan Becher was appointed CMO, and immediately began driving a platform effectively combining both the art and science of marketing. He elaborated, “[I]… think ‘business first, marketing second.’ From that comes a mantra that marketing is a business, not just a division that supports a business.”

Becher recognized that SAP Marketing was excellent at communicating clear messages that grew brand awareness, but he wanted to institute an approach that would align his team to build a culture that supported a measurable SAP Marketing strategy with overall company goals. Thus, SAP Marketing developed 5 key “transformation pillars” to drive all future marketing activities. By using these pillars as guide posts, Becher and SAP Marketing set to update SAP’s image to match its new and expanded product portfolio. Key performance indicators (KPIs) were created to measure marketing outcomes, rather than marketing activities. To further align incentives and encourage staff members to work together, bonuses were tied to achieving the 10 collective KPI’s.

SAP Marketing’s changes led Paul Greenberg, a customer relationship management and technology author, to declare, “SAP has transformed their company from…a highly traditional, conservative, closed company, to an open innovative, accessible organization…”

Learn how SAP Marketing was able to revitalize SAP’s brand against target business metrics and read more about how they plan to continue moving forward in today’s dynamic business environment in the new case study.

Download Run Marketing as a Business Part 1 and Part II.

By Matthew Quint

Case Study: Woori’s OneDo Strategy to Become a Top Asian Bank

Much is now written on the rise of “brand South Korea,” but the country’s financial institutions are still lagging. Chairman and CEO Pal-Seung Lee of the Woori Financial Group wants to change that. “Woori must become one of the top 10 financial institutions in Asia over the next decade.” This is a place that no South Korean company has yet held.

In a new case study released by the Columbia’s Center on Global Brand Leadership, Professors Hun-Joon Park, Dong-il Jung and Bernd Schmitt explore how South Korea’s Woori Finance Holdings Co. developed a strategy to cut costs, increase customer service quality and empower employees throughout the organization. This resulted in increased revenue production and lower overhead costs, helping drive Chairman Lee’s goal for Woori to be one of Asia’s top 10 financial institutes.

Woori Finance Holdings Co., Ltd. was formed in April 2001 when Hanvit Bank merged with several other smaller banks. It was the first and largest holdings group in South Korea, Woori Finance Holdings immediately realized that a more customer-centric business mindset was needed, but at the same time, cost savings were critical to success. In 2009, the global financial crisis pushed these priorities to the forefront of Woori Finance Holdings’ concerns, and so OneDo was born.

What began as a strategic cost reduction program quickly evolved into a way of thinking that soon embedded itself into the culture of Woori. OneDo was conceived to build the Woori Group into a “Strong Organization through Low Cost and High Efficiency.” The name OneDo encapsulates everything the initiative stands for. “One” emphasizes that the organization is one family, and is striving to be the top player in the industry. “Do” conveys a proactive and creative attitude; employees are encouraged to take responsibility and take action.

OneDo was created with four main principles that have driven growth within the company over the last four years:

• Ask questions — Find waste in day-to-day operations
• Change perspectives — Find causes of problems through shifting paradigms
• Gather ideas — Collect wisdom to solve problems
• Eliminate waste — Remove non-value-added work

Read the full study (.pdf) to learn more about how Woori’s Chairman & CEO, Mr. Pal-Seung Lee, used OneDo to harness the energy of his employees to drive Woori’s evolution into a global player in the finance industry.

BY MATTHEW QUINT AND ALENA CHIANG

What Can You Learn from a Chief Big Ass?

“My first impression, when I heard of the company,” notes a current Big Ass Fans employee, “is that I would never work for this company in my life.” A bold name does hold some risks, even for a company that makes gigantic industrial fans. CEO Carey Smith found, however, that his decision to commit to the name yielded tremendous rewards.

Mike O’Toole, President of PJA Advertising + Marketing, talks with Smith in the first episode of PJA’s new radio show, The Uncoventionals, which our Center on Global Brand Leadership is proud to be sponsoring.

In a wonderful and frank conversation, CEO Smith talks about:

• How the name was inspired by listening to the customer
• How it differentiated the company’s communications in a traditionally bland industry
• How it created a purpose that drives his tribe of nearly 300 employees to live up to this moniker, with a focus on R&D to build the best fans possible

As Smith notes, “it peaks interest, but that isn’t building a business…. It has, though, given us an opportunity to build a company that is substantial.” It starts with the name, but it can’t stop there.

Listen to Carey Smith for insights that you can apply to your business.

Subscribe to The Unconventionals podcast on iTunes as we help support upcoming shows on IdeaPaint, Relay Rides, Dollar Shave Club, and Converse.

Happy Customers Everywhere: An Evening with Prof. Schmitt and Friends (5/2/12)

Columbia Business School’s Center on Global Brand Leadership presents One Happy Book Launch: An Evening with Author Prof. Bernd Schmitt Co-sponsored by the Columbia Business School Alumni Club of New York Wednesday, May 2, 2012 6:30pm – 8:30pm Cost: $20 ($15 for Columbia Business School alumni) Hosted by: Edelman 250 Hudson Street, 16th Floor, New York, NY

Join us for a wine reception with author, Professor Bernd Schmitt, and a special discussion with leading marketers on their efforts to create happy customers and organizations.

	Bernd Schmitt Robert D. Calkins Professor of International Business, Columbia Business School
	Julie Cottineau Founder, BrandTwist; Former VP of Brand, Virgin USA
	Peter DeNunzio President, Customer Loyalty, Aimia US
	Owen Rankin Executive Vice President, Brand Stewardship, Edelman

Includes: Food, wine, special snacks and a free raffle for copies of Happy Customers Everywhere

REGISTER AT: http://happycustomerseverywhere.eventbrite.com

About the Book:

Every business knows that the best customer is a happy customer. They return time and again, bring their friends and family, and deliver tons of free advertising via word of mouth and social media. But in order to grow that loyal base, you must be keenly aware of your customers’ needs and preferences. Drawing on the latest research in the exploding field of positive psychology, SCHMITT offers three unique approaches any business can use to turn a casual customer into a committed fan:

• The Feel-Good Method: Use the experience of pleasure and positive emotion to hook new customers, and watch those feel-good moments transform a casual customer into a committed loyalist
• The Values-and-Meaning Method: Attract passionate customers by appealing to their core values, like being socially responsible, protecting the environment, or living a simple life
• The Engagement Method: Get customers to notice a unique or limited offer, immerse them in the experience, and have them share it with friends and family.

Schmitt shows marketers, brand managers, and entrepreneurs how to design an authentic and successful campaign that will reach, grow, and sustain a devoted base of customers.

New Study: Marketers Struggle with “Big Data” & Digital Tools

The Center on Global Brand Leadership and the New York American Marketing Association (NYAMA) are pleased to release the results of a major new study on the changing practices of large corporations in:

• data collection and usage,
• marketing measurement and ROI, and
• the integration of digital and traditional marketing.

The BRITE-NYAMA Marketing Measurement in Transition Study was authored by David Rogers, Executive Director of BRITE, and Columbia Business School Professor Don Sexton. Results were first released at the Center’s fifth annual BRITE conference on May 5, 2012. The findings have been reported in numerous publications, including the top front-page story of Ad Age.

The study’s results focused on 3 main findings:

1. The failure of “Big Data” for marketing
2. Marketers are quick to adopt the newest digital tools, but struggle to measure them
3. ROI – marketers know they need it, but cannot agree on its meaning and implementation

The full report can be viewed at http://j.mp/MarketingROIstudy.

FINDING: THE FAILURE OF BIG DATA FOR MARKETING SO FAR
The researchers found that marketers’ desire to be data-driven is not yet matched by a consistent effort to collect the data necessary to make these real-time decisions. 29 percent report that their marketing departments have “too little or no customer/consumer data.” When data is collected by marketers, it is often not appropriate to real-time decision making. 39 percent of marketers say that their data is collected “too infrequently or not real-time enough.” Furthermore, marketers today are still much less likely to collect new forms of digital data like customer mobile device data (19 percent collect it), and social media data (35 percent), than they are to collect traditional customer survey data on demographics (74 percent) and usage (60 percent).

FINDING: MARKETERS ADOPT NEW DIGITAL TOOLS, BUT STRUGGLE TO MEASURE THEM
Marketers are also struggling to measure the impact of the newest digital tools, despite the widespread adoption of these applications. 51 percent of marketers said they use mobile ads (in-app, or SMS); 85 percent use social network accounts (brand accounts on Facebook, Twitter, Google+, and Foursquare). Yet these tools are among the least likely to be measured for ROI despite their profusion of data. Only 14 percent of the social networking users are tying them to financial metrics, and only 17 percent of those using mobile ads are tying them to financial metrics. By contrast, 41 percent of email marketers measure their results with financial metrics. In addition, as number of marketing tools expands, the challenge of measuring and comparing them grows. 60 percent of companies report that comparing the effectiveness of marketing across their different digital media is “a major challenge.”

Click image to enlarge

FINDING: ROI – MARKETERS KNOW THEY ALL NEED IT, BUT CAN’T EVEN AGREE WHAT IT IS
The study also revealed that there is confusion about the meaning and significance of ROI among marketers. Specifically, 31 percent of respondents said that they believe simply measuring the audience you have reached is “marketing ROI.” 57 percent are not basing their marketing budgets on any ROI analysis, and 28 percent are basing marketing budgets on gut instincts. 21 percent are using financial metrics for “little” or “none” of their marketing budget and seven percent are spending most or all of their marketing budget with “no metrics” at all. However, marketers are under pressure. 70 percent say that their marketing efforts are under greater scrutiny than in the past.

CONCLUSIONS: FIVE IMPERATIVE ACTIONS FOR CMOS
After its analysis of the dynamic and challenging environment for marketing today, the report recommends that Chief Marketing Officers should focus on five key leadership imperatives: Set objectives first; Design metrics to ensure marketing is linked to these objectives; Gather the right data for those metrics; Communicate to the entire organization what your objectives are and how they are being measured; and Evaluate and reward employees in part on how well objectives are achieved.

Read the complete findings and conclusions at http://j.mp/MarketingROIstudy.

# # #

METHODOLOGY
253 corporate marketing decision makers, director-level and above, were surveyed online between January 27 and February 8, 2012. These professionals are employed at large companies (90 percent have a global annual revenue of over $50 million; 45 percent are over $1 billion). Respondents were from b2c and b2c companies in diverse industries. The study was made possible with support from Research Now and GreenBook.

ABOUT THE RESEARCH PARTNERS:

The Center on Global Brand Leadership was founded at Columbia Business School in 1999 and has grown into the leading global forum on brands. The mission of the center is to turn the research and intellectual capital of academia’s foremost thinkers on branding into practical tools and insights for real-world application. The Center has worked with a wide range of sponsor companies to develop a variety of thought leadership including: conferences, case studies, videos and webinars, and sponsored research. The Center’s flagship BRITE conference on brands, innovation, and technology presented was founded in 2008 and is presented each spring at Columbia University. BRITE ’12 speakers included John Hayes (CMO, American Express), Marc Speichert (CMO, L’Oreal USA), and Bob Garfield (host of On the Media, editor for Ad Age).

The New York American Marketing Association (NYAMA) helps marketing professionals navigate to success in today’s dynamic business environment. We serve the marketing community by giving members opportunities to push the boundaries of marketing, expand their skills and exchange ideas with other experienced professionals. The BRITE/NYAMA study is one example of how we are contributing to the advancement of marketing.

Research Now is the leading global online sampling and online data collection company. With over 6 million panelists in 38 countries worldwide, Research Now enables companies to listen to and interact with real consumers and business decision makers in order to make key business decisions. Research Now offers a full suite of data collection services, including social media sampling, and operates the Valued Opinions(tm) Panel and e-Rewards(r) Opinion Panels. The company has a multilingual staff located in 24 offices around the globe and has been recognized for four consecutive years as the industry leader in client satisfaction.

GreenBook® brings stimulating, practical, and timely resources to marketers and market researchers on both sides of the table. Through its targeted multi-media platform, GreenBook offers effective marketing and lead generation opportunities to businesses that communicate with buyers and users of market research.