What’s Your Advertising Agency Accountable For?

Hold your ad agency accountable for resultsAds, of course.  Lots of ‘em.  Creative ones.  Ones that win awards.  Ads your boss will love.  Ads the agency loves to work on.  Beautifully illustrated, brilliantly written ads.  Oh, and a media plan.  Carefully crafted for the highest delivery, more points, lower CPMs.

That’s all swell, except you don’t need ads or CPMs.  What you need are customers that are buying your product.  Unfortunately, what many advertisers fail to do is to hire an advertising agency for accountable results.

Amazingly, accountability is a concept that often strikes fear in the hearts of both ad agencies and marketing managers.

 in the hearts of both ad agencies and marketing managersIs that because the agency’s creative director is more interested in making “cool” ads than boosting sales?  Is your marketing manager more interested in going on the photo shoot than delivering customers?  Is the account executive spending more time on the fairway than talking to your distributors?

You may have heard (or even made) those kinds of accusations at one time or another.  But, in all likelihood, they’re unfounded.  The real problem is the lack of a plan.  Without a plan, neither the agency nor your marketing staff know, with confidence, what is expected of them.  The accountability for the advertising plan starts at the very top of your corporate ladder.

There are four essential links in the planning chain that precede the ad plan.  Like any chain, if you remove a link, it falls apart.  And, if you expect to make your advertising agency accountable, they need to be familiar with all the elements that provide the foundation for the advertising plan.

In order of occurrence and importance:

1.  Mission Statement – Whether you’re a billion-dollar public company or a half-million dollar retailer, you should have a straight forward mission statement that everyone – yes, positively every employee in your company – should know and understand.  In one simple paragraph, you should state why you’re in business.

2.  Strategic Plan – This is a three to five-year view of how you plan to achieve your mission.  It anticipates risks and opportunities in the marketplace, and strategies to prepare your business for them, through organizational structure, capital investments, distribution channels,  product mix, etc.  A strategic plan should be a continually evolving document, although one that changes too radically or too often is impossible to implement.

3.  Marketing Plan – The marketing plan is an annualized version of the strategic plan, emphasizing tactical implementation:  What do we want to do this year and how do we plan to do it?

4.  Communications Plan – One of the subsets of the marketing plan, the communications plan should incorporate advertising, public relations, employee communications and community relations.  It should clearly identify communications objectives, strategies and tactics.

5.  Advertising Plan – Finally, we’re there.  But don’t get too comfortable.  You’ll probably need multiple advertising plans, one for each campaign or each brand, product or service that you plan to advertise.

Who Is Responsible for the Advertising Plan?

The ad plan should be written by the agency – probably a team effort of the account supervisor, planner, creative director and media director.  They don’t pull the information out of thin air – the input comes from the client.  The ad plan encapsulates all of that input (often gleaned from days of meetings and pages of research) into a simple and brief document (not more than a couple of pages) that confirms the agency knows what is expected of them.  The plan should be presented by the agency to everyone responsible for approvals at the client company, and a consensus reached.

What’s In the Advertising Plan?  

Avoiding badvertisingThe advertising plan consists of a series of basic questions and simple, straight-forward answers to each.  Specifically:

Why are we advertising?  There is only one reason to advertise:  To create a fundamental change in consumer behavior.  What behavioral change are you trying to make with your advertising campaign?  Among the most common possibilities:  Cause consumers to buy your product and not your competitors’ products; Cause customers to buy your product more often; Cause customers to pay more for your product; or, Cause customers to visit the point-of-purchase more often.

“To increase sales” talks about internal goals, but doesn’t address changes in consumer behavior.  Similarly, “to improve our image” or “increase brand awareness” are attitudinal rather than behavioral changes that fail to address a tangible result.

Beware of multiple answers.  If you have more than one goal, you should expect the results of each one to be diminished accordingly.

The next two questions need insightful, unbiased knowledge of your marketplace.  Whether you commission your own research study, purchase syndicated research or get the data from a sophisticated trade association, it is essential that you reach beyond your own empirical knowledge of the marketplace.

Who are we talking to and how do they act?  This question combines quantitative and qualitative issues.  “Who are we talking to” is a matter of defining your target audience in every possible respect.  Traditional demographics (age, gender, income and geography) are essential data for a consumer media plan.  For a business-to-business plan, the answer must identify markets and/or industries, typical titles of buyers and influencers, etc.  The more narrowly you define the audience, the more effectively targeted the advertising can be, in both media and creative terms.

“How do they act” addresses behavioral issues.  For instance:  Are they skeptical, conservative buyers that demand proof or are you after early adopters?  Are they driven by practicality or status?

What do they think of our product/service/company?  Do consumers perceive your product as the best quality, most desirable, best value, lowest cost, market leader, prestigious, – or all the opposites?  Maybe they don’t think of it at all!  If you’re launching a new product, go further and identify consumers’ attitudes towards your brand.

What do we want them to think of our product/service/company?  How do you want your product positioned in the minds of consumers?  Should it change?

What is the competitive environment?  What other messages are consumers receiving from your competitors?  What threats or opportunities do they pose for your advertising campaign?

What is the single most persuasive idea we can convey?  This is sometimes called a unique selling proposition, or USP.  What is the most important reason someone should buy your product or service over your competitors’?  The answer should always be stated in terms of consumer benefit, not simply product feature.

Why should they believe it?  The last question was reason to buy, this is reason to believe.  Your ad makes a claim, back it up.  Offer a free trial, cite independent research, refer to past experience – the more real your claim, the more sound and credible the evidence must be.

What 3 to 5 words define the brand personality?  Brands, even institutional and industrial products, have personalities associated with them.  Words such as “elegant,” “tough” or “trustworthy” convey that sense of personality.  Researchers sometimes ask consumers about personalities in terms of animals: “If brand-x were an animal, what would it be?”  Answers to this question can be enlightening and frightening!

Bewitched ad teamHow will we know if the advertising was successful?   Finally, we’re back to accountability.  To answer this, you’ve got to go back to the first question about why you’re advertising.  Having identified that goal, how will you measure it, and what performance is acceptable?

If you want your agency to be accountable, you have to agree to a plan that everyone can follow, beginning with a mission statement.  Include your agency in goal-setting, and the budgeting process to meet those goals.

Let your agency know that they’re accountable for results, not for ads or CPMs.  What about those great creative ads and brilliant media plans?  Truth is, they’ll never deliver results without them.

Special thanks to Todd Steele for his help with this post.

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8 Steps to Building a Customer-Focused Commercialization Strategy

8 Steps to a Commercialization StrategyBefore a commercialization plan can be developed and implemented, it must be driven by an overall commercialization strategy. By taking a strategic approach to your commercialization strategy, you will be better positioned to be successful with your new product launch.

The commercialization strategy should not contain a lot of financial detail or “how to,” but it must be consumer focused and customer centered and not technology focused. A key issue in a commercialization strategy is to set the direction to explore and understand the market. The commercialization strategy must focus on what satisfies the needs of the customer.

8 questions you need to answer in your commercialization strategy

1. What’s the Offering? (What are we trying to provide or create?)

Commercialization Strategy TipsAt a high level, clearly state what products and services are being offered to the market.

Identify what other products/services may need to be provided to be a credible supplier to the customer and the channel. Identify, at a high level the anticipated pricing strategy at the end-user level and for the expected distribution channels.

2. What is the Adjacency Assessment of the product or service? (How does the product or service align with the core business areas?)

Chris Zook in, Beyond the Core, addresses the concept of Adjacency or the relationship of an opportunity to your core business and competencies. Zook defines several things when looking at an opportunity:

1)    Core – Known business strengths and competencies

2)    Adjacency – Relationship to the Core ranked from 0 (identical to the core) to Diversification (a completely new area).

 3)    Shared Economics – There are five dimensions that when evaluated and measure the distance from the core and can be used to determine the degree of relationship to the core:

  • Customers – Are they the same as, or different from, customers currently served?
  • Competitors – Are they the same as, or different from, competitors currently encountered?
  • Cost Structure – Is the cost structure (infrastructure) the same or different?
  • Channels of distribution –Are these the same or different?
  • Singular capability/technology – If there is a singular capability (brand, asset, technology) that gives the core business its uniqueness, then is this relevant in the new opportunity?

3. Who is (are) the Targeted Customer(s)? (Who do we really think will want the product/service and Why?)

Identify who is (are) the targeted customer(s) – end-user, big box retailer, distributor, internal business unit, etc. Who are we trying to sell this product or service? Keep in mind that the targeted customer(s) may change as more marketing and Voice of the Customer data is collected.

Why is this customer believed to be the real customer? It is toward this customer that the Business Proposition will be initially oriented. It is toward this customer that the Business Plan will be structured.

4. State the “Business Proposition”

Strategy and Marketing traffic sign in the handThe business proposition describes what the product or service offers that no other product can.

It is important that the Business Proposition be benefit focused. For example, Coke quenches thirst. Coke is also a good rust remover but it will NEVER advertised as such.

The Business Proposition should take caution not to over advertise advantages – in other words, DON’T clutter the message. The more focused the message, the more likely to clearly communicate it.

Have a single Value Proposition – Keep It Simple – the KISS principle.

When developing a business proposition think of what people are buying.

Customers are not buying a product – they are buying what that product does for them. Customers don’t typically buy a product because they fall in love with the technology. Customers buy the SATISFACTION OF NEEDS. The Business Proposition MUST clearly state how that need will be satisfied.

Doug Hall, in his book, Jump Start Your Business Brain, addresses three key elements to Stating Value:

1) Overt Benefit to the Customer – What is the real benefit to be realized? Engineers love to talk specifications – “This car will go from zero to 60 in 3.2 seconds.” Buyers want to feel the wind in their hair and the thrill of feeling the force of their heads being pushed against the back of the seat.

2) Dynamic Difference – What makes our product/service any different that what is now available? Unless this product is for a total new and untapped market, customers have choices.

3) Real Reason to Believe – What gives the customer confidence that we can deliver the product or service we are offering? For example, “We have had Z years of 100% customer satisfaction as measured by JD Powers.”

5. State the “VALUE CHAIN”

Sales leadership stepsThe Value Chain relates to the business processes of the company selling the product.

Questions to be answered are:

  • Who will sell the product? Whoever has sales responsibility must be aligned with the Value Proposition – they must care that the product/service really does meet the customer’s real need.
  • Where will the product be sold? This may need to be clarified in later, but initially, choose the logical area(s) that fits in with your Value Proposition.
  • How do you distribute your product? What is (are) the expected distribution channel(s)?

The Value Chain and Business Processes must be aligned as close as possible to the Value Proposition. The closer the alignment, the greater the probability of success.

6. How will the product/service be Marketed?

Brand idea chartAt a high level, what is the basic marketing approach? Consider the following:

  • Who will provide the marketing activities?
  • Who internally will oversee that the marketing activities are done correctly?
  • Identify logical points to test assumptions, validate alignment with the Value Chain and/or Business Proposition, and logical changes/adjustments to the marketing approach, the Value Chain, or the Business Proposition.
  • What is the overall Communication Strategy for getting the message out to potential customers?

7. Provide a rough-order-of-magnitude Business Plan

Given the information available, give a high-level assessment of the business potential for the three years after commercial launch. Try to be realistic, meaning not overly optimistic nor overly conservative.

Items to consider are:

  • Sales
  • Gross Margin and Gross Margin as a percent of Sales
  • Operating Income and Operating Income as a percent of Sales
  • CAPEX
  • RONA

8. Major Commercialization Risks/Issues/Obstacles/Support Requirements?

What significant commercialization items can keep this effort from being successful? What support is needed from management, gatekeepers, resource managers, etc.

Write out what the risks are and rate them High, Medium or Low. Put a few ideas down on how you can mitigate these risk.

Don’t use a Ready, Fire, Aim commercialization strategy

readyfireaimTo maximize your chances for success, you need to be thoughtful in developing the strategies behind your new products.

Innovation can happen in the commercialization of a product as easily as in the product itself.

Think about all the ways you can build upon and leverage your commercialization strategy and you might find your sales teams more engaged in the product launch, your customers understanding what’s in it for them, and ultimately your new product goals being achieved.

Good Selling!

A special thanks to Lowell Dye for his help in better understanding the product development process and in writing this post.

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4 Steps to Building an Internal Communication Plan

Effective internal communication is critical to your manufacturing successCommunication is critical within any business setting, but most importantly within a manufacturing facilities − where the right communication can really impact change and translate into business success.

What’s the best way to communicate?  How much should you communicate?  How do you make sure your messages are heard?  This guide will take you step-by-step through the communication process.  It has simple, practical, easy-to-follow information you can put to use immediately.

This post also discusses strategic planning − why it’s done, how it’s done, and why it’s important.  But it’s not all strategy.  You will also find information about developing and implementing your communications plan, assigning responsibilities and mapping out your tactics.

Why strategic communication planning?

If you are to succeed and prosper in your industry, then you must contribute significantly and measurably to strategic management.  You must think, act, and manage communication programs strategically, recording measurable results that contribute to the accomplishment of the organization’s mission.  Remember, the only reason organizational communication programs exist is to achieve measurable results that help the organization realize its mission.

What is a communication plan?

A communication plan should be closely linked with the mission, goals, objectives, strategies and tactics of the organization in a measurable wayA communication plan should be closely linked with the mission, goals, objectives, strategies and tactics of the organization in a measurable way.  A communication plan is a written statement of what communication actions you will engage in to support the accomplishment of specific organizational goals, the time frame for carrying out the plan, the budget and measurable results.

A suggested model for a communication plan has the following elements:

  1. Background
  2. Situation analysis
  3. Key Messages
  4. Target Audience
  5. Objectives
  6. Tactics/Implementation
  7. Evaluation and assessment

How long a time period should the plan cover?

The period your plan should cover depends on several variables, such as the issues your plant is dealing with.  It is suggested that your plan be updated on an annual basis.

How to begin building your internal communication plan

1. Form a plant communications committee

How to begin building your internal communication planThis team will be responsible for creating the plant-specific strategic communication plan and then executing the tactics. Your plant team should consist of the following:

1 Plant leader
1 Salaried employee
2 Primary employees (senior employee and newer employee)
1 union leadership member, if plant is unionized
1 communications employee (person currently responsible for plant communications)

Your team should be representative of the plant workforce. It’s important to involve all levels of the organization in the planning process. Employees must feel a part of the process to take ownership in the plan and execute it enthusiastically.

Team members should be chosen based on the following:

  • Willingness to take part
  • Show an interest in improving plant-wide communication
  • Willingness to take responsibility for executing parts of the plan
  • Have a good understanding of plant dynamics. Pick employees who tend to know the latest hot issues in the plant and who have insight on how their peers prefer to receive information
  • Enjoy working as part of a team

Purpose of the team:

  • Improve communications throughout the plant.
  • Serve as an advisory counsel for the plant manager, union leaders or others who wish to share information within the plant.
  • Develop new vehicles for communicating.
  • Improve existing plant communication vehicles.
  • Be a liaison between organizational levels to relay information both upwards and downwards.
  • Improve two-way communication between management and primary workers.
  • Serve as a resource for all plant personnel to use when needing to share information.

Choose a communications committee team leader. It will be the responsibility of this person to delegate assignments, schedule meetings and basically, keep the team on track. Often, it will be this team leader who will serve a direct liaison between the committee and plant management.

Finally, once your committee has assembled and a leader is chosen, a team charter needs to be drafted. Clearly define on paper the purpose of your team. What do you want to accomplish and by when? It is then imperative that plant management supports this charter and agreement is reached on the expectations of the committee.

2. Review the business plan

Analysis is the first step to communication planning.What business are you in? What’s the plant’s mission? Who are your customers and markets? What’s the current outlook and forecast for the plant? Who’s the competition and what do you know about them?

Analysis is the first step to communication planning. You must know where you are now before deciding which way to go next. It is important to understand all factors of the business that impact communication. In addition, it will often be the business objectives and forecasts that will need communicated throughout your location.

It will be important not only to review your plant’s mission and goals, but also the business unit in which you work. Next, identify communication themes based on business goals you will choose to be communicated at your site. For example, you may feel it is important to stress the company’s core values, but also drive messages on operational excellence, customer intimacy or product leadership.

3. Gather data

It’s important to have the right information before beginning your plan. There are several things to identify in the data gathering part of communication planning that require information from your audience–the employees at your location.

Information to be gathered:

  • Effectiveness of existing communications
  • How employees prefer to receive information
  • Current “hot issues” in the plant
  • Things that impede communication
  • Suggestions for improving communication

How to gather data:

  • Surveys—Give employees a list of questions to be answered, either written or verbally.  Survey participation is usually greatest when it is anonymous and confidential.  If it is a written survey, include a self-addressed stamped envelope.  However, response rates tend to increase dramatically when you allow employees to complete the survey during working hours in a confidential environment.  Phone surveys are also an option.
  • Focus Groups—Focus groups work best if they contain between 10 to 12 people and the groups consist of employees at relatively the same organizational level. Focus groups are an easy way to involve a large number of employees over a short time. Holding a focus group prior to issuing a survey is also a good way to make sure your survey addresses the right issues.
  • One-on-one interviews—allow employees to share their views quickly and candidly. Interviews are more time-consuming, but produce instant feedback.

4. Analyze the data

Review the data gathered and understand the attitude and concerns of the employees. Look for recurring themes or issues – your communication plan should address them.

Use a SWOT analysis to look at the data. SWOT focuses on the Strengths, Weaknesses, Opportunities and Threats of a given situation.  Perform this exercise using your current communication system, plugging in the data gathered.

Performance Area Now Future
Strengths—what communication practices are working?
Weaknesses—what weaknesses need to be overcome to improve communication?
Opportunities—what communication opportunities exist that haven’t previously been recognized?
Threats—what threats must be overcome?

That’s it for the pre-work.  My next post will focus on the 7 steps to writing an internal communications plan. What ideas and examples do you have?