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Your B2B customer loyalty is at risk

Customer relationships that are focused too intently on a single sales rep may be at risk.

B2B sales force turnover continues to worsen, with a total churn rate of 34.7 percent in 2017, according to some studies. The high cost of replacing and retraining sales reps is painful enough. But there is a potentially more damaging risk that can arise from this rapidly revolving door — one that is best summed up as the “Loyalty Giveaway.”

Loyalty Giveaway is when customer loyalty resides primarily with the sales rep, or other customer-facing employee, as opposed to the company or brand that provides the product or service. Where does loss of customer loyalty begin?

Everyone knows the story of the boy too shy to talk to the girl, who enlists the help of his friend to become his mouthpiece. In the end, the friend and the girl develop the relationship, while the boy gets left out. Why? It’s hard to develop a relationship with — and loyalty to — someone with whom you have no direct, meaningful connection.

It’s much the same with sales-driven B2B companies, which too frequently delegate all relationship management responsibilities, including customer communication and the customer experience, to a single sales rep (who then becomes too much of a “star” to the client). If that rep walks out your door, the customer relationship and its revenue are likely to follow.

Problems beyond loss of loyalty

As if loss of loyalty, and the eventual loss of your customers, isn’t enough, there’s another major downside to the “single sales rep as the star” model: immediate loss of sales opportunities.

Even the best sales reps will selectively sell, naturally concentrating on what facilitates their individual sales goals rather than the company’s overall objectives. When a client interfaces only with one rep, they can get incomplete information, potentially missing or misunderstanding the company’s full offering. Not to mention that sales reps fall into the trap of “familiarity fatigue” – over time they begin to ask the same probing questions, fail to creatively diagnose customer needs and bring a unique perspective to problems. As a result, upselling and cross-selling opportunities are missed, because the company never fully understands the customer’s needs, and the customer never comes to fully understand the full depth and breadth of the company.

The Loyalty Takeback: 7 things to keep customers from walking

Loss of loyalty happens over time, and addressing the core causes can take time, too. Nonetheless, there are immediate steps you can take to move away from the “single sales rep as the star” model and begin transferring customer loyalty back to your company and brand.

1) Evaluate your risk of customers leaving when reps walk.

Look at your most important customers — the twenty percent that make up eighty percent of your revenue. How many of these customers are based on the single-rep as the star model, with the rep serving as the sole or predominant source of contact? And of those customers, how long has the rep “owned” the customer relationship? A larger number of single-rep customer relationships, and/or long-term customer relationships “owned” by your sales reps puts your company at great risk of customer defection if a rep walks.

2) Deﬁne your customer experience.

Loyalty grows from providing an unparalleled overall experience that the customer wants to repeat. Some people call this “brand experience,” and it is indeed guided by your brand strategy — but it’s all about the customer. Arriving at your unique strategy to empower a positive customer experience requires answering fundamental questions:

What does your customer base desire and value?
What is your compelling and differentiating value proposition?
What promise are you making and how do you want your customers to feel every time they interact with your company?
What are the touchpoints your customer has with your company across the entire lifecycle of the relationship or product/service usage?
Who is responsible for delivering these touchpoints?
How can you improve, elevate or positively change each touchpoint to deliver your promise and value proposition?

Once you deﬁne your strategy, it will in turn deﬁne and guide the kind of experience you need to imbue in every customer communication and interaction.

3) Create a constellation – the account team.

You need to create a consistent, compelling, captivating experience across all touchpoints in a customer relationship, not just via a rep. Your entire organization should become a “constellation” of customer-facing stars, comprised of company leadership, experts and functional roles beyond just sales. Whether your team is two or 20, the key point is to create a team that is more than just one sales rep.

Be sure that each team member has a meaningful role, so that each contact provides customer value and doesn’t simply take up time. Make certain to prescribe the amount of contact each member has, and measure it. Don’t forget to involve executives. Every client feels important when they get attention from the top (or near it). Create regular opportunities for client face time with your business and sales leadership at road shows, ﬁeld visits, VIP meetings or even phone calls and emails.

4) Create an account plan; involve the customer.

The ultimate customer relationship is one trusting enough that joint strategic planning takes place regularly, in which you work closely to review the relationship, evaluate performance, and look ahead to identify areas that can be mutual wins. Short of that, your account team can still make its own plan, informed by your multiple customer contact points, and focused on a customized approach to serving their speciﬁc needs and goals.

5) Provide actionable training.

Identify the trainable behaviors you want your people to display, those that reinforce the customer experience you want every customer to enjoy. To what lengths are sales and customer service reps encouraged to go to please the customer? How much room do they have to create a customized solution for their client? Be speciﬁc and train with situational examples and role play. Then regularly acknowledge individuals who display these behaviors in order to reinforce them.

6) Establish an intentional, consistent, direct communications program.

The sales rep is there primarily to sell, not inform. It’s up to you to directly communicate about your company to your customer. Keep them up-to-date on your vision, growth, hiring, new products and initiatives — all the things that create awareness and shape perceptions.

7) Deliver innovations and value that make customers stick.

A powerful means to avoid Loyalty Giveaway is through innovations that deliver exemplary value to the customer. This can encompass products and services, value-added programs, insights and advisory consultations, and certiﬁcations and training, among others. When you deliver exceptional value, you create a “must-have” situation that makes customers stick with your company – not your sales rep.

There will always be sales force turnover, but that doesn’t mean you have to turn over your customers to your salespeople. By creating a multifaceted approach to customer communications and relationship management, any B2B company can prevent the Loyalty Giveaway.

What is An Effective B2B Rebranding Process?

What does – or should – rebranding really mean for a business-to-business organization? And how can you, as a B2B marketer, ensure a successful rebrand?

First, let’s look at the word itself: rebrand. It’s tossed around so much as to almost be a misnomer. In decades of helping B2B organizations create growth through change, we’ve found that when people request a ‘rebrand,’ they’re really thinking of leaving it at what we call a ‘brand refresh:” new logo, new look, new materials. But this is barely touching the surface

When we get them to look a little deeper – and help them examine the strategic business opportunity underlying the marketing request – they invariably realize the value of a full brand repositioning. This means and organization-wide analysis and definition to articulate what makes you different and unique in terms of the value you deliver to your customers.

This delves far below the surface – it can require examining, and sometimes retooling, how you formulate your offering, operate, go to market, engage customers (and employees), communicate visually and verbally… to name just a few of the possible points of transformation.

Obviously, this is a tall order, and one often made more difficult than in B2C because of the non-marketing, non-customer-centric manufacturing mentality and culture at many B2B organizations. So we’ve learned to help marketers with their very first task – making the business case for branding. If the case is made directly to top leadership, and then socialized it across functions, the brand repositioning effort will enjoy the support and participation it requires.

The power of Be. Do. Say.^®

Even with the necessary support, brand repositioning may seem too daunting a task.

After all, it is often brought on by moments of “big change” (and stress) such as mergers and acquisitions or changes in leadership. But our decades of experience has shown that B2B organizations can successfully navigate the rebranding process if they concentrate on just three words: Be. Do. Say.

Discover who you truly are and ‘Be’ that – always.

First, define your “Be.” Discovery is the first phase of any effective brand repositioning. However, sales-driven B2B organizations often confuse product (features and cost) with brand (purpose and promise), making it difficult for the company to “get over itself,” and get out to deeply understand its customers, competition and marketplace. Those that do are much better able to discover the truth of their situation, and begin to formulate a new brand positioning to maximize it.

One important note: if you really want to “get over yourself” and clearly see your organization’s situation, it’s best to get an objective expert from outside. Find an experienced firm or consultant who can ask the tough questions – with the freedom to keep probing. “What unique value do you bring your customers?” “What truly motivates you to do so?” These and a wealth of other questions will help you get at the essence of who you are, why you matter – and where you do and don’t align on the answers to those key issues.

Once you see what you can honestly ‘Be,’ you’ll be able to identify your core purpose, and define your mission, vision, values and brand promise. These essential pillars of your brand should, in this discovery and strategy phase, be encapsulated in clear, concise statements, to use as guideposts and yardsticks for all the branding work to come.

‘Do’ the things that make who you are self-evident.

Too many brand efforts try to jump from the strategy phase right into communications. But in a world where the well-worn truism of “actions speak louder than words” still resonates with deeply skeptical employees and customers, the wise B2B company will first invest in creating the policies and programs that make your claims self-evident.

This may require product improvement or innovation, special employee and sales force training, or the creation of new customer policies and service initiatives. Yes, this takes time and money, but the return is clear: when customers can see for themselves that your promise is true, you transform the relationship into one that builds loyalty, shortens sales cycles, justifies premium pricing, and increases market share.

Of course, all of this external benefit depends on what you’ve done internally. Brands with a strong internal message, training and on-going internal branding program more easily attract and retain the best employees, which further enhances delivery of your core brand promise.

Whatever you ‘Say,’ do so simply, clearly and memorably.

Once your ‘Be’ and ‘Do’ are well-established and aligned, you can begin to ‘Say’ things for yourself. And by ‘say,’ we don’t just mean put a tagline under a logo (not that a good theme line isn’t a powerful communicator). Your brand messaging should encompass a full program, meaning any form of communication that conveys your brand purpose and promise. This could entail creating a new logo and overall graphic look that better represents your clarified brand. It could mean developing a new, unified brand voice to give common character to all communications. It could involve the development of innovative content that is memorable not for its cleverness but for its helpfulness (especially important in B2B).

In all likelihood, a complete brand repositioning will find you ‘saying’ all of the above in multi-faceted campaign (it is, after all, a multi-touchpoint world out there).

Be. Do. Say. It’s not just a catchy trademark for the highly-effective brand repositioning process we created. It’s a proven way to align your promise to the market with the actions of your company and your ability to deliver.

It’s also been the key to the transformation of many successful B2B brands, including TransUnion, Ingredion, and Tosca, to name just a few. In fact, it’s been so successful that our CEO, Bob Domenz, was interviewed by Branding Magazine about the challenges of rebranding, an interview in which he not only describes “Be. Do. Say.” but also covers the perils of getting that process out of order.

For more information on what goes into a successfully repositioning your brand, please contact us directly.

Additional resources:
The Rebranding Readiness Assessment
The 10 Dos and Don’ts of Rebranding
Rebranding and Post-Merger Integration

How B2B CMOs use change to drive growth

This first appeared in Branding Magazine

Change is said to be the only constant—and in business, change is prompted by the constant need to for growth. But how can B2B organizations better manage, nurture and capitalize on the many types of change, to produce meaningful growth? There’s one powerful discipline that I have seen work time and again, but which still gets too little attention in B2B organizations: branding.

To get expert input on the subject of managing, instigating and optimizing change through brand, I spoke with three experts:

Mohanbir Sawhney, PhD, noted marketing and management consultant, author and McCormick Foundation Chair of Technology, Clinical Professor of Marketing, and Director of the Center for Research in Technology & Innovation at the Kellogg School of Management.

Jim Merkel, Executive Director, Corporate Sales & Marketing for Scot Forge, a 123-year-old, 100% employee-owned, mid-size organization providing forged metal products from the most basic to the most demanding (e.g., the wheels for NASA’s Curiosity Rover).

George Parr, Senior Vice President and Chief Marketing Officer for SIRVA Worldwide, a global leader in executive relocation and consumer moving.

We discussed the various types of business change: proactive vs. reactive, transformational vs. incremental, and on-going. As a rule, change is almost always tied to a trigger event such as the arrival of a new CEO, or an acquisition that requires integrating two entities into one, or a marketplace disruption that demands an organization change (or face irrelevance).

The important exception to that “trigger event” rule is found in a truth applicable to all business—that the constant need for growth, itself inherently a form of change, requires marketers to perpetually, proactively leverage brand as a tool in the growth plan.

Our conversations illuminated several key realities I’ve long noted in helping dozens of B2B companies capitalize on moments of change:

Change is about growth
Brand can help accelerate and improve the outcomes of change and growth initiatives:
— Internally, brand helps create and sustain cultural change and alignment
— Externally, brand helps transform buyer attitudes, beliefs and behaviors
Marketers can improve outcomes of their organizations change efforts, and elevate their own positions in the process, when they strategically act in the role of change agent

Change is about growth

“The biggest hurdle, the biggest need for change,” says Sawhney, “comes from an inability to grow in a sustainable and a profitable way. A lot of the problems we see companies get into, like mergers or de-merging, as in the recent announcement that Xerox is going to split-up, comes down to growth. In that case, they’ve only been able to grow their top-line…but their revenue growth is negative.”

The direct relationship between change and growth is precisely why brand marketing and the CMOs that lead it can have such a positive impact—after all, their ability to understand the customer and create strong brands to serve them is key to creating stronger top and bottom lines.

Brand change demands organizational change

There are two basic ways that B2B companies look at change. “One is what I call the superficial approach—or putting lipstick on a pig,” says Sawhney. “Then there is the more fundamental approach, which is real transformation.

Branding is an articulation of your organizations purpose and customer promise. Rebranding in an effort to change customer perceptions and experience can only truly be effective if it goes hand-in-hand with a more fundamental change in how you deliver on your promise to the customer—beyond what you say or how you communicate it.

What I sometimes see is companies pursuing this exercise only to the extent of ‘We’re going to change our logo,’ or ‘We’re going to change our brand.’ For example, American Airlines recently changed their logo and repainted all their planes. But the service still sucks and they’ve done nothing new about what’s inside the plane.” Not exactly a formula for growing a customer base and the additional revenue that goes with it.

Of course, what he’s describing is what countless change projects have taught me to call the Be. Do. Say. principle.

Be. Do. Say.^®

In short, to create sustainable growth through change, an organization must follow Be. Do. Say. First, an organization must define what it aspires to “Be”— the vision and outcome of the change and what aspects of the business it is committed to meaningfully transform (e.g., improvements in product, culture, brand, operations, policies, customer experience, etc.) in order to realize that vision. These changes must then be put into action—it is the “Do-ing” that makes the change self-evident. Only after “Be” and “Do” are well established can or should you “Say” anything through major statements in branding and marketing.

Proof of change must come first; brand and communication follows.

When organizations get this sequence out of order, and begin Say-ing before their Be-ing and Do-ing are in order, the consequences are visibly evident and inevitably counterproductive. The American Airlines example Sawhney mentions illustrates this.

Internally, brand can help create and sustain cultural change and alignment

Building that evidence of real change begins internally, and here is another place where brand can really shine. A good branding process will dig down to your foundations, helping the organization discover its true purpose and honest promise, and define its unique beliefs and value system. Internal brand communications and training can then disseminate and amplify this brand essence, using it to align merging cultures, refocus a workforce and motivate employees to consistently deliver the all-important customer experience.

However, there is a caveat, as Sawhney frankly councils, saying, “If you are going to use a brand as a vehicle to communicate the culture, then cultural change needs to be authentic and it needs to be deep seated. It needs to be led from the top and be embraced by everybody.

One of the most common mistakes I see in this context is that you hire a branding agency and your marketing people and your brand teams sit in smoke-filled rooms and come up with the new brand and the new slogan, and then try to use that as a way to drive cultural change. The problem is, if employees aren’t brought into it, if nobody engaged them, they feel; ‘Okay, so here is the new slogan. So what?’

There’s actually an acronym for how they feel, BOHICA, or ‘Bend over here is comes again.’ That shows just how deep employee skepticism can run when it comes to change. People see cultural change as something that needs to reflected in behaviors, not just in slogans.”

Externally, brand can transform buyer attitudes, beliefs and behaviors

Ultimately, brand unifies, equalizes and empowers internal culture not for the corporation’s sake, but for the customer’s.

George Parr of SIRVA offers this about brand-led change, which can often be confused as an inwardly-focused effort only: ““It all starts with insights,” he says. “Everything begins and ends with the customer. The companies that are great marketing companies are not great because they have a terrific marketing function. It’s because everyone in the company is focused on delivering exceptional outcomes for their target segments, doing that consistently over time, and understanding how they each play a role [in those customer outcomes].

But, once again, the promises to customers built out of those insights must prove out in practice. “The CMO as brand steward must also ensure that the promise as articulated in your messaging is actually what the customers are experiencing,” says Sawhney. “Because what is the brand at the end of the day? A brand is the sum total of the experiences that customers have across all touch points.

The brand is really the memory of an experience. If there is a dissonance or disconnect between what people hear about through communications and what they actually experience, then it really hurts you in the long run. What I would try to do as a CMO is to provide stewardship and orchestration, and try to get inserted more strategically in the conversation, so that I could push for authenticity.”

The frustrating thing for many marketers about authenticity is that, by definition, it can’t be manufactured. It has to be discovered, revealed. That’s why Scot Forge, when they noticed their marketplace start to change, began to listen more closely.

According to Jim Merkel, their Executive Director of Corporate Sales & Marketing, “We held very formalized listening events. We brought a cross-functional team, with the majority not in a customer-facing role, to a host of customers, to listen and understand where their challenges are. They each had different wants and needs—and that’s where we developed some of the segmentation and specialization we’ve done. Our goal was to connect our employees to our customers, so they can feel the difference our employee ownership culture makes.

It also gave us direction on how to better support our customers’ needs. In the past, it might have been one person as a direct contact. Now customers are interacting with a team, they have a direct hotline to new technical resources, things like that.”

The upshot? Meaningful improvements in customer segmentation, service and satisfaction from a brand that listened and changed to be more of what they heard customers say they needed.

Marketers improve outcomes, and elevate their own positions, when they strategically embrace the role of change agent

The CMO is starting to be recognized as a change leader in some of the best B2B organizations—once they’ve secured a seat at the strategy table. “Beth Comstock at GE has been very much a part of that change conversation,” says Sawhney. “In fact, she owns the growth and innovation initiatives at GE. Of course, she has now become the vice chairman at GE, so that illustrates just how much of a seat at the table she had.

“I see this at other companies, too. At Emerson Electric, CMO Kathy Button-Bell has really been driving that conversation strategically. And at Microsoft, Chris Capossela has a lot of credibility in the organization and he is a key right hand person to Satya Nadella [Microsoft’s CEO].

It’s happening, but there is still I a very small minority of B2B CMO’s who really have that seat at the table. Partly it’s the leadership team that is to blame, but partly I think it’s the CMO’s duty to elevate their role.”

There are a number of ways CMOs can boost their profile and influence. Sawhney advises marketers to “demonstrate the value that marketing adds to the top-line growth, to revenues, to market expansion— that is the kind of value that most CEO’s understand. Some CEO’s don’t understand the value of brand and brand equity at all, but they get it when you tell them ‘I can help you drive growth. I can be a growth partner.’ That’s how you can elevate your role inside the company and get more strategic—first demonstrate how marketing drives growth rather than just creates communications.”

Parr concurs, saying, “Look for opportunities where, in helping the business, you can demonstrate what’s possible for marketing. Give them that experiential evidence.”

A final word for marketers who want to be change agents

At the end of our conversations, I asked how a CMO or other senior marketer can best position themselves for a role in creating and managing change in B2B companies.

“I like to say there are 3 Ps,” replied Parr, “Patience, perspective and perseverance.
You really have to come in with what I call a missionary mindset. Look for opportunities where, in helping the business, you can demonstrate what’s possible for marketing. Give them that experiential evidence.

Having that perspective is key, along with establishing the right pacing for the organization. The worst thing you can do coming into a B2B organization as a new CMO is to move at one speed while the rest of the organization is moving at another.

Then the last thing is perseverance. There are going to be days where you feel you’re not getting anywhere. But if you’re doing your job effectively, if you’ve got that missionary mindset, if you’re striving for the experiential evidence and the business is benefiting from the new initiatives you’re putting in place, eventually the organization is going to get there. You just have to keep at it.

If it was easy, everybody would be doing it, right?”

B2B Innovation: Why dead center thinking is dead wrong

Industry benchmarks. Competitive assessments. Best practices. Customer research. It’s all the standard stuff of responsible business-to-business marketing—but when it comes to uncovering and creating the kinds of innovation that will truly transform a business and its fortunes, that sort of “dead center” thinking may be dead wrong.

This possibility came up in a recent conversation I had with Robert Wolcott, Founder and Executive Director of the Kellogg Innovation Network. I was asking him how B2B CMOs, like the ones I work with every day, can best impact innovation in their organizations. After answering a long list of my questions, he made a special point of saying, “I’d like to add one thing. CMOs in general are in an ideal place to keep track of peripheries.”

Peripheries. Not one of the standard B2B buzzwords, and all the more intriguing because of it.

Get out on the edge, where big threats and opportunities emerge

Wolcott continued: “Peripheries are technologies or companies outside of the normal flow of your business, outside of your industry usually. They’re the ones out on the edges.

They’re important because the big threats and the big opportunities come from the peripheries. They don’t tend to come from the middle of your industry because you already know everything your competitors are doing and they know everything you’re doing.

Yes, companies need to keep an eye on the competition—but companies tend to get myopic. They get very very focused on what they’re doing now, what their direct competitors are doing, benchmarking it all to get at best practices.

The thing is, you never become the best by just adhering to best practice. Because after you learn what a competitor’s doing, you’re likely to set up a team so you can do it, too. Pretty soon, two years has gone by and you’re doing what your competition was doing two years ago.

Improve your IQ outside your own market

I asked Wolcott what advice he would give marketers who find themselves in that “best practice rut.” He replied, “Part of what the B2B CMO and their marketing group should be good at is market intelligence—and I don’t mean just intelligence in your own market. Reach well beyond your category to find practices, technologies, offerings, business models that could be transferred and translated into your business, into your industry and markets.

This should be a role that marketing can get quite good at and therefore help find new opportunities— and even find some potential threats—that others inside the company haven’t noticed but that could be coming in the future. I think this is a key role for marketers, and a way to elevate the marketing function within a B2B organization, especially in a world that is changing far faster than it ever has before.”

Ask yourself these three questions
In our work at Avenue helping B2B CMOs create growth and meaningful change, we continually encounter the issues and opportunities Wolcott articulates. Addressing them requires a significant shift in how B2B marketers typically think, and to help move the marketing mindset off dead center, it’s useful to begin by asking three key questions:

Why do you want to innovate–what’s your real purpose?
Innovation is often mistaken as a goal unto itself. First ask yourself how is “innovation” expected to impact your organization: Do you seek breakthrough products and technologies that can move you into new markets? Are you trying to find more efficient ways of conducting the core business? Are you looking to spark a cultural and mindset change throughout the organization?
The discussion that accompanies these questions, often raises another set of fundamental inquiry about purpose: What’s our vision? Why do we matter? What difference do we make to our customers? What do we want to become? Until you’ve answered these foundational questions, you’ll have a hard time coherently building your brand and business through innovation (or any other means).

How much of an explorer are you—really?
Next, ask yourself honestly—how much exploring outside your own industry do you currently do? Are you a Neil Armstrong, taking giant leaps into totally new worlds for your organization? Or are you too comfortable staying at mission control and letting others do the exploring?

As a senior marketer, you can increase your range of exploration in many ways. For instance (and these are just a few possibilities):

Routinely keep at least one book on your active reading list that isn’t in your wheelhouse
Attend at least one major non-industry event annually, such as TED or SXSW
Every quarter, go to a networking or learning lunch outside of your industry or area of personal expertise
Make time to visit a tech incubator, or request a tour of an organization you admire outside your category

That last point touches on one of the biggest challenges for any executive—available time. If your schedule truly doesn’t allow time for the above, get creative. For instance, you could sponsor a grad school class or team and challenge them to explore and report on the most promising peripheries for your business.

How can you best share what you discover?
Finally, ask yourself how you can most effectively share what you’ve discovered. CMO’s and marketing leaders are naturally in a position to help inspire new thinking, encourage others to explore and, above all, create a new and larger aperture through which your organization can envision a more innovative future.

You should consider at least two on-going efforts:

Organization-wide communication about innovation: Curate your findings into a quarterly newsletter or other creative communication vehicle—think about how message delivery can be as innovative as the messages delivered.
Leadership presentations: Schedule semi-annual executive briefings. This will allow you to inform top leaders about relevant advances outside your industry, and spark conversation about how those could apply to your organization. That discussion will also help you surface the areas of highest interest to the C-suite, and fine-tune your future exploration and briefings.

The responsibility to reliably hit targets, especially in the short term, understandably has marketers thinking about the “dead center” of what’s been known to work in our industries. However, as Wolcott and others point out, if you want to innovate, stay relevant and even leap ahead of your category pack, that kind of thinking may be dead wrong.

B2B strategy insights: Innovation for growth

This first appeared in The B2B CMO column, authored by Bob Domenz for Branding Magazine.

When we think about innovation, the popular image that comes to mind is the B2C company with its formal focus on innovation centers, ethnographic research, and new technology and product breakthroughs.

Meanwhile, many B2B companies, especially mid-sized, don’t think of themselves as innovative, let alone have they developed an “innovation capability” with dedicated processes, staff, facilities and funding.

Nonetheless, innovation is every bit as important in B2B as in B2C, and the B2B marketer has the opportunity to make a significant impact in this area of their organization. To help our readers envision their own paths to becoming B2B innovators, I reached out to several leading thinkers and practitioners, specifically to explore the role of the CMO in B2B innovation.

I had lively conversations with:

Kim Metcalf-Kupres, CMO of Johnson Controls, where she not only guides branding and marketing but also officially “owns” the innovation function.

Richard Wergan, Global Head of Brand, Communications and Digital for Philips, which not long ago returned to its brand roots as an innovator, with special emphasis on business-to-business.

Robert C. Wolcott, Ph.D., Clinical Professor of Innovation and Entrepreneurship at the Kellogg School of Management, Co-Founder and Executive Director of the Kellogg Innovation Network (KIN) and a managing partner at the growth strategy consulting company Clareo, home of the CMO Forum.

We explored three big questions:

How do you define innovation?
How is innovation different in B2B than B2C?
What should be a B2B CMO’s role in innovation?

While the conversations with all three experts went much deeper than this column can cover, four themes emerged:

Innovation needs to be defined against the unique goals and context of your organization.
Don’t limit that definition to just new products or technologies—innovation can include both continuous improvement efforts (finding efficiencies in the core business) as well as new growth efforts, and should encompass all aspects of your business.
While there are indeed distinctions between innovation in B2C and B2B, there are fewer differences than popular perceptions suggest.
B2B marketing leaders are uniquely qualified to drive innovation in their organizations—but their roles, much like innovation itself, must be tailored to the context of each organization. (see chart below)

Here are the highlights of the interviews.

How do you define innovation?

Kim Metcalf-Kupres:
I think that this one of those age-old battles or debates. The quest to define innovation is a bit like answering the question of which came first: the chicken or the egg?

At Johnson Controls, we have adopted a very inclusive definition. We want to encourage innovation and continuous improvement along the spectrum—either driving cost savings or process improvements on the operations side of the house, or growth-engine opportunities on the commercial side.

If you define innovation too tightly you can choke it out. If you define it too broadly and don’t make it actionable, then all you end up with are a lot of sparkly objects and cool ideas that you can’t act on.

Richard Wergan:
At Phillips we have a brand promise that is based on a core idea of delivering meaningful innovation that matters to people. This means it needs to be based on individual needs and must provide benefits to an individual. It then needs to provide benefit to a community, to society, and must be delivered in a way that is also sustainable.

Sometimes there’s lots of innovation that is not based on an individual’s needs, but could potentially be just innovation for innovation’s sake. I think it’s up to organizations and brands to really start putting some meaning around what innovation means to them, so that it is delivered against appropriate KPIs and has an appropriate focus. It should be a beacon of light for the business, rather than some sort of generic term.

Robert Wolcott:
We can define innovation generically or academically, but rather than worrying about definitions, we should look at innovation based on our objectives. What are we trying to accomplish? For instance, if you’re trying to accomplish significant revenue growth, then what you’re looking for in terms of innovation is going to be different than if you’re trying to win a Nobel Prize in physics.

I’ve always wanted to define it based on the context—what are we trying to accomplish from a business perspective? Now, the two definitions of innovation I like are both from Joseph Schumpeter, the very first person to bring innovation into the realm of economics. He defined innovation in two ways: one, as “something newly tried,” so obviously that encompasses a lot; the other definition he used was “new combinations.”

While I like both definitions, I prefer “new combinations” because Schumpeter, being an economist, was not just talking about combining technologies to create a new product. He also meant combinations between technology and capabilities—so it doesn’t have to be formally a technology, it could be a process or something broadly defined as a technology.

Those are the two definitions I like to use—but I always want to quickly get to understand the objectives and then figure out what innovation should mean in your context.

How is innovation different in B2B than B2C?

Kim Metcalf-Kupres:
At its core, innovation is very similar when you go from one setting to another. A lot of the precepts around innovation—such as business building, networks, divergent and convergent thinking, minimum viable products, experimentation…and linking efforts to incremental investments—those things could describe a B2B or a B2C company.

I think the B2B problems we try to solve may be a little bit different. For instance, we’ve got more orientation on supply chain, and our product cycles are longer than what you see in a lot of consumer segments. Therefore, the ecosystems and partnerships that we build are going to be different.

Richard Wergan:
When it comes to delivering on innovation it doesn’t matter whether you’re in B2C or B2B. Much of the way that we approach innovation is ultimately about understanding the benefits to the end user and to the customer.

However, in B2B or business-to-government, very often there is a guardian or channel for a purchase, and we need to understand the complexities of [the purchase decision-making structure] to ensure that the benefits of products and value-propositions are understood [throughout the purchasing process].

I think there’s a nuance here of focusing on the end user, whilst understanding there’s a channel, or a lens through which B2B marketers need to look if we’re going to be successful.

Robert Wolcott:
I would say my first reaction is that the difference in how people innovate is going to be a lot greater between companies as opposed to between B2B versus B2C.

However, one thing that I have noticed that is especially true at many B2B companies is the way they think about their relationship with customers. In B2B, what often happens is people will say, “Oh, we’re customer focused. As soon as the customer calls, we’re on it. We respond, we talk with them all the time, ‘What do you need? What do you want?’ If they tell us they need something, we go and develop it and we’re very responsive.”

That’s a good thing, but if that’s all you’re doing then really what you’re doing is being customer reactive, and that’s not enough. It’s not enough for a variety of reasons. In particular, it’s not enough because if they’re telling you that they need something, they’re probably also telling your competitors the same thing, so that’s not enough to stay ahead of the competition.

The big opportunity for a lot of B2B companies is to ask, “How can we become customer leading?” How can we think beyond what the customers are already telling us? What the customers already know that they need? How can we think about what they don’t even know is possible, but which would add a lot of value for them? That’s where B2B needs to go.

What should be a B2B CMO’s role in innovation?

Robert Wolcott:
Marketing per se leading the innovation effort is not so much the point. It certainly can be the right function to lead the innovation effort, (and) a great driver for innovation. And it needs to be a serious part of any significant innovation efforts.

Marketing and the CMO should certainly be part of the planning for, “What’s the next horizon for the company? What new kinds of offerings and/or business do we need to create to stay relevant and stay ahead of our customers and competition?”

I believe that a real marketing function needs to have a significant role in that— which, of course, presupposes that your marketing function is a real marketing function. If marketing is just sales support—and there’s nothing wrong with sales support—then it’s not going to have much to say about “What should we develop? How should we get there? What investments should we make?”

On the other hand, if you have a true marketing capability at your company, the kind of marketing competency that asks, “Who are our customers? Who should they be? How do we understand them deeply and what their needs are even if they can’t tell us sometimes? What position should we be building in the market from a brand perspective?” If you have a true marketing function which asks and answers those kind of questions, then absolutely that capability needs to be at the table when you’re talking about innovation.

Richard Wergan:
If innovation is very much at the heart of the brand, it is easier for the CMO to get a seat at the table. But I don’t see the necessity for innovation to be at the heart of every brand proposition on the planet. Being honest about the role of innovation in your organization is important. Just as there tends to be greenwashing there’s innovation washing and innovation fatigue.

I think that the role of the CMO, when it comes to ensuring that innovation is delivered in B2B, is to adapt–to own and drive innovation through the business, and be able to influence and support it where they see it.

I would also say that the CMO can demonstrate how co-creation can drive the innovation agenda. By co-creation I mean teaming up with other parts of the organization, teaming with external partners, and bringing customers into the process, so that you are empowering the organization to innovate.

Kim Metcalf-Kupres:
My charter as CMO is a very broad one that includes strategy, business transformation, innovation, marketing and sales capabilities for the company and communication and brand. Even if you don’t have a seat at that many tables, as a senior marketer you can certainly have a significant role in innovation.

First, you need to understand and be very clear about your company’s objectives for innovation. If the object is growth, then marketers can certainly drive growth strategies by helping create a presence in new markets, with new products and offerings. If leadership is trying to create a culture of innovation, but it’s not directly tied to building your portfolio of businesses, well, that requires a different set of skills, but one that could certainly be in a CMO’s skill set.

No matter what the objective for innovation, marketing can and should play a roll simply because of its core competencies and ability to provide customer insights, market trends and market insights with which you can create linkage into the innovation engine. In short, any CMO can be a value-added contributor to innovation, whether you’re in the driver’s seat or not.

Find your role in innovation

The chart below is offered not as a definitive self-assessment tool but as a thought starter. It’s designed to help you begin to identify the role you can play and the possible next steps to take toward boosting your influence and value within your organization’s innovation effort.

Start by asking yourself two questions:

What is the role and strength of marketing within your organization today—is it one of the functions that drive the business, or a support function?
How developed is innovation within your organization—is it embryonic or established?

Which profile do you fit?

Innovation catalyst

SITUATION:
Marketing is a leading force within your organization, but you haven’t (yet) formally defined what innovation is or undertaken an initiative to develop an innovation capability. As the owner of customer insights and data, macro trends, product launches and the like, you should be in an ideal position to become the catalyst for formally defining innovation and the goals, structure and resources needed to develop the capability.

THE KEY QUESTION:
Can you become the catalyst who identifies the need for a formal innovation capability–and, in doing so, become positioned as the key driver or owner of it?

Next-level innovator

SITUATION:
You are in a sophisticated organization, possessing an established innovation function within a marketing-driven company. In this situation, the CMO is often a key contributor and driver of innovation efforts, and may be the owner.

THE KEY QUESTION:
As an owner or key driver of innovation today, what can you do to elevate your organization’s capabilities to the next level?

Conversation starter

SITUATION:
Innovation as a capability or initiative doesn’t yet exist within your organization, and marketing isn’t a lead driver of the business. You can help your organization become more innovative by acting as an advocate and promoter of the function.

THE KEY QUESTION:
What can you do to raise awareness and interest in innovation within your organization—and to take the first steps toward creating a culture of innovation?

Value-added contributor

SITUATION:
Your organization has an established innovation capability, but marketing is not a leading function for the business. In this situation, your first objective may be getting a seat at the innovation table, or, if already there, becoming a stronger contributor—and with that raising the profile and influence of marketing.

THE KEY QUESTION:
What can you do to become (and be seen as) a co-creator of innovation who adds value to your organization’s innovation efforts?

Every marketing leader can positively impact innovation in their organization. However, there isn’t one answer or model that applies to all situations. You should seek to create a role that best fits the specific goals, needs, operating model and culture of your company. If you are successful, you will improve innovation, which in turn will improve business results… and thereby also enhance the position of marketing within your company.