Reading: The Value of a Marketing MBA

There's been all kinds of trash talk about whether the modern day graduate with an MBA is worth his or her salt. Last week's article in Ad Age" adds fuel to the fire, much to the chagrin of American Universities. The article, entitled "M.B.A.'s May be a Marketing Liability" highlights a recent survey of 22 consumer products companies, including General Mills, Post, Nestle, Pfizer, Hazbro and others. It also used scanner and panel data from VNU’s ACNielsen.

In short, the study shows that marketers from companies with significant market-share gains are far less likely to have M.B.A.s than those from companies posting significant share losses. Further, the study shows that marketing executives from underperforming companies were twice as likely to have been recruited out of M.B.A. programs than marketing executives from out-performing companies.

The article is worth a read, and here are a few more highlights (as quoted or as summarized from the article):
  • In underperforming companies 90% of executives had MBA degrees vs. 55% in outperforming companies.

  • The out-performers in the survey got about a fifth of their marketing executives from undergraduate programs and another fifth from advertising or marketing agencies or other industry vendors. None of the executives from underperformers had been recruited as undergrads and only 5% came from agencies or suppliers.

  • Out-performers averaged one marketing executive for every $37.9 million in sales, compared to one for every $28.5 million in sales at the underperformers. Staffing levels were also higher at companies with a high level of marketing outsourcing.

  • Out-performers in the survey placed a much higher value on personal and professional development once they hire people. The survey showed the share winners far more likely than the losers to support attendance at industry conferences and seminars, involvement in industry associations and peer-share groups, internal training groups, formal mentoring programs and graduate-level seminars.
  • In a consumer driven society, we need people who understand business and think like customers … people who understand how to create comprehensive, measurable user experiences that drive solid results.

    The article indicates there's a strong benefit in hiring individuals with practical, hands-on experience and maturity... especially in competitive markets. As product commoditization places an increasing emphasis on the comprehensive customer experience, we’re also seeing increasing demand for individuals who understand cross-channel experience management, integrated marketing, interaction design, usability, cultural ethnography, analytics and more.

    What’s your opinion of the modern day M.B.A.? When you look at the performance of individuals possessing an M.B.A. degree vs. other individuals in comparable positions, do you find anything that's missing? What qualities are most important as you consider hiring innovative, seasoned professionals? Weigh in by leaving a comment!

    The Drug Store Experience

    We're living in an era with a rapidly aging majority, and a culture that has become increasingly dependent on medical science and pharmaceutical support. Here in the U.S., we're bombarded with hundreds of embedded messages, ads, commercials for drugs promising us a stronger, healthier, more virile, low-risk, pain-free experience.

    As prescription and OTC drugs play an increasing role in our lives, the corner drug store has become a thing of the past. Today, we purchase drugs where we buy our groceries. We shop for groceries, toiletries, even housewares where we buy our drugs, drop off our photos and even dry cleaning. As self-medication has become (for better or worse) a ritual in many American families, drugstores have taken on an entirely new role...a role of convenience. Perhaps this is why, Rite Aid Drug Stores is reengineering its brick and mortar experience.

    According to a recent DDI Magazine article, the 40+ year old drug store veteran is in the process of launching a dynamic new store design. The experience, dubbed the Customer World" design "highlights the importance of the pharmacy" as a focal point of the stores. Instead of being sequestered in the back, the pharmacy areas have been relocated - front and center. They've also been designed to serve as a more intimate setting, featuring more comfortable waiting areas and private consultation areas.

    In addition to repositioning the pharmacy, the new Rite Aid stores will feature wider aisles, higher ceilings, brigher and more modern environments. Reengineering product placement and store traffic has been a focus of the store redesign, as well. According to the article, "Customers can walk 'around the world,' or around the perimeter of the store, which showcases a wider selection of products." Improved departmental signs and visual cues have also been introduced to make it easier for customers to find products. Rite Aid plans to launch the design in 80 new or relocated stores and 200 remodeled stores. In the next five years, the chain plans 800 to 1,000 new and relocated stores.

    All this seems to be a direct compliment to Rite Aid's Tag line, "With Us, It's Personal." Sounds nice - we'll see!

    By the by....DDI web site has some terrific articles. A real gem, however is DDI's Retail Design Diva Blog . Check it out for really great brick and mortar experience reads! Thanks DDI.

    Experience Finders Keepers 2006

    Spring is bringing a lot of exciting opportunities. this April, I am honored to speak at the Marketing Profs 2006 Finders Keepers Executive Retreat in Santa Barbara. These folks are dedicated to creating something fresh and new - and not your typical conference. Think smaller, intimate, meaningful dialog with industry thought leaders. I'll be talking about the relationship between customer experience and customer loyalty.

    Marketing Prof's Chief Content Officer, Ann Handley described the getaway well in this week's Newsletter:
    "As longtime readers of MarketingProfs know, our team gathers every few months in Santa Barbara, California, to talk turkey (and to shop the Territory Ahead outlet). In fact, Santa Babs—specifically, the Upham Hotel on de la Vina—has become our virtual headquarters.

    So it makes perfect sense that we are holding our upcoming conference there—after all, our readers are a big part of MarketingProfs, and we want to share the love with you. The event is called "Finders, Keepers: Finding Prospects & Keeping Customers," and it's being held a month from now, on April 20-21.

    On hand will be some of our best and most popular authors—the sharpest tools in the MarketingProfs shed.

    Publisher Allen Weiss will give the keynote address on creating customer relationships that last; Leigh Duncan with talk about customer loyalty; Jim Lenskold chats up metrics; and our own Roy Young will talk about finding customers from within. All in all, eight authors will give you the ins and outs of finding customers and keeping them happy.

    I've been to a lot of industry events and tradeshows. And one thing has always bugged me: Speakers show up, deliver their speech, and high-tail it back to the airport to catch the next flight out.

    If that model is the equivalent of a drive-through fast-food lunch, our event is decidedly different: more like a leisurely four-star meal that stretches well into the afternoon. Our speakers will hang around—they'll linger at the table. It's an informal, relaxed way to exchange ideas, hear advice, and learn.

    For that reason, "Finders, Keepers" is more executive retreat than industry tradeshow—in other words, the number of attendees is firmly capped at 50.

    More than half of those seats are already gone, but there's still room. Check out the program—and, if need be, beg your boss to let you attend. Hope to see you there!
    Hope to see you April 20-21!

    The Bad Experience Threshold

    While chatting with a pal the other day, we discussed a tenant of interpersonal relationship management we had both heard. It asserts that, for every negative thing you say to another individual, you must say (something like) three (some say seven or even ten) positive things to counteract the interpersonal impacts of the negative comment or criticism you said.

    I've been trying to find this rule or principle on the internet, without success. When/if I do, I'll correct myself or cite the resource. If you've heard it, feel free to post a comment with the correct "rule".

    This got me thinking about the impact of negative customer experience on the individual. How many negative experiences will a customer endure before they walk away? How many good experiences do you have to offer in order to right a wrong? When does customer relationship damage caused by experience pitfalls become irreparable? The answers to these questions are definitely not straight forward. They'll also vary with the customer and business dynamics.

    If you're say, the DMV, or the airport, a public bathroom, or a cable company, your monopoloy on service creates a higher tolerance threshold for bad experience. For those types of companies, the "preturbed masses" will tolerate bad or faulty experience because they simply have no choice. Dulles Airport, anyone?

    In highly competitive markets, it's fair to say, there's a much smaller threshold within which to get it right. If you, for example, are interested in purchasing a car and have an unfortunate encounter with "Edgardo, the snake oil salesman" you can always cross the street to visit Billy Bob ... or have dealers compete for your business through the internet.

    If you're fortunate enough to build a brand that has a secure fan base -- I'm not talking just a customer base - but customers who are frothing fans -- you may have a much higher threshold for experience hiccups. Apple Computer is one such company. My last Experience File Post about the Tysons Corner Apple store yielded more than a few emails and comments from dedicated Apple fans.(It wasn't an attack folks - just constructive criticism).

    Perhaps we can illustrate the delicate balance on the tolerance scale like this...


    ... or maybe not. The beef I have with the graphic above is that it doesn't show one other critical dynamic that will tip the tolerance scale might be tipped. The best way I know how to describe it is "number of times you've disappointed the customer before" dynamic...

    Figuring out what the tolerance thresholds are for your customers, and coming up with customer satisfaction policy and plans that mitigate risk in a cost-efficient manner is a really important exercise today. To do this effectively, it's necessary to be able to properly evaluate:

    1. The true quality of the end-to-end, cross channel experience
    2. How, when and why customer experience goes wrong
    3. Key areas that present the most opportunity and/or cause the most damage
    4. Customer Lifetime Value (CLV) or profitabilty of each customer segment
    5. The quantifiable cost of customer loss

    When companies have the ability to measure the items above effectively, they can properly allocate investment dollars to refine and tailor customer experiences. Unfortunately, so many companies today get caught up in driving innovation (experiential marketing; flashy campaigns) they forget that delivering the experience fundamentals is a crucial element for base-level customer loyalty.

    Success requires a three fold approach: First, companies must carry a focus on maintaining and perfecting the delivery of the experience fundmentals. The fundamentals support all customer segments and create a strong foundation for individualized experiences that can foster unique loyalty. They create cohesion. Second, allocating spend for the enhancement, customization and improvement customer experience (e.g. developing loyalty programs; tiered service offerings; etc.) is also important. This is best managed by aligning dollars against prioritized customer segments based CLV, profitability -- even word-of-mouth scores. Finally, we have to test experiences, measure outcomes and refine them in a more disciplined, quantifiable way.

    This is all stuff we know, right? The problem is that many of us are still struggling hard with cohesively creating, measuring and managing cross-channel experiences and customer value. Until we get better at this, we're going to continue to struggle with the mystery of the threshold. Until we get better at it, we have to work from what we do know:

    Experiences that are cumulatively, positive, generally yield brand recognition that is cumulatively positive.
  • There’s no magic formula for success
  • Customers tend to remember “what you’ve done for them lately”
  • Negative experiences carry more “weight” in the minds of consumers
  • Every customer will have a different threshold for bad experience
             -->Higher for companies with a monopoly on service
             -->Higher where they have fewer choices
             -->Lower in highly competitive markets

    Just thinking out loud...
  • Customer Experience Files - Taking a Bite out of Apple

    I spent some time at the Apple Store in Tyson’s Corner Virginia recently. We came in with a simple mission: secure some Nano gear for a 15 year old. While I’m a huge Mac fan, I must say that our experience was surprisingly underwhelming… In fact, it was bad, folks. While it's possible the problems we encountered are isolated to this store, there are some good lessons to be noted for anyone managing the retail merchandising experience.

    First, upon entry into the store, it wasn’t clear where to go. We didn't see signs anywhere. As we wandered the crowded store and browsed the products at the tables, we realized accessories must be somewhere else. We meandered into the center of the store, where several rows of chest-high shelving held computing accessories. The problem was, there were no signs to indicate whether the items on each shelf were for IPOD, Mini, Nano…etc. So we were forced to look hard and long for what we needed. It was very crowded, and traffic spilled into our aisleways from what we later discovered was the "Genius Bar."

    The accessory shelves, which started at about chest height and continued to the floor, were very cumbersome to navigate. First, they were dark grey, if I remember correctly. This, combined with the bright lighting and the low angle of the merchandise created shadows that made it hard to read packaging from a distance. Second, the aisle between the shelving units was perhaps three feet wide. This made the action of bending down to look at the lower shelves quite awkward: In the squat position, a customer would block the aisle, and customers bending over often bumped into each other. Frankly, it was more full contact than I usually like to have in my retail shopping experience.

    Ultimately, we couldn't find what we really wanted, so we grabbed a charger and decided to check out and escape the crowded store. Checking out was harder than anticipated. We searched for the checkout area, assuming that the elevated Genius Bar was it. At first glance, it looked like a checkout line: The positioning made sense. It was a raised counter with computer screens and employees in front of them. There was a line leading up to the counter, and employees in front of computer screens were helping people. However, after getting in the line with and watching the activities taking place, we soon realized this was not the checkout line along with several other people.

    After another lap of the store, we found the checkout area, which was a low counter at the front of the store. We stood there with three other customers for what seemed like an eternity. One audibly complained about the store's disorganization, stating she would rather not visit the store again. The couple in back of us nodded in agreement.

    As we waited in line, I suddenly noticed the signs meant to label the various “zones” around the store were hanging in a tabular format from the ceiling. These were awkwardly above a normal line-of-sight for a store visitor. As I pointed this out to my friend, I observed that, from a design perspective, they also blended in with the ceiling, which made them almost indistinguishable. The woman next to me listened in and voiced adamant agreement with my comment. This was when I decided I had to blog on this subject.

    Collectively, my Apple Store experience really surprised me. I am a HUGE fan of Apple and was a loyal Mac user for more than a decade - continuing today to be a devoted IPOD user. I love the creativity embodied by Apple, the history of innovation, their dedication to clean, ergonimic design and experience. However, we all learn from trial and error, and there are some real experience challenges here that I do hope Apple will carefully consider:

    Wayfinding and Visual Cues: Clean lines are a hallmark of every Apple store…and the low shelves at center help maintain line-of-sight to the back of the store, where multimedia presentations, Pro Workshops and Unplugged events are offered. The problem is that despite the clean design concept, navigating store is difficult and annoying. I'd wage a bet that the lack of intuitive navigation inside this brick and mortar store sets preference for individuals to shop at stores like Best Buy or Target (ironic, since I believe the head of Apple's retail division hails from Target...). Merchandising at these stores is, for the most part, superior - all products are an easy eye and arm reach.... It's easy for customers need to find what they need quickly, without asking for help.

    Not only was it difficult to get help, the only sign that is NOT white-on-white in the store's white and grey color schema is the Exit sign above the door. I find it ironic that the only clear direction to be found was THE WAY OUT. The signage that is meant to be helpful is placed out of the customer's line-of-sight, not easily distinguishable or missing entirely.

    There are some easy fixes for the problems at the Tysons Apple Store:
  • Make each station more easily identifiable. This can be accomplished through improved signage (placement, design) and reinforced by more intuitive wall visuals. Place signs within the average visitor's line-of-sight and use colors that easily stand out against the background color scheme. Add labels to accessory shelving to make the browsing process more intuitive and easy.

  • Place potentially congested areas at a comfortable distance from other congested areas (in this case, the Accessories area vs. the Genius Bar). This will reduce confusion and help customers browse comfortably - without the added congestion of the adjacent area.

  • Offer visitors a little “storientation.” At a minimal level, post an employee at the front to greet and direct customers. Depending on the unique needs (size, layout) of each store, offering informational cards, kiosks and simple layout signs may be helpful, as well.
  • Roadblocks: Beyond not understanding where to go, it's important not to throw barriers up that prevent customers from getting what they want quickly and efficiently. The roadblocks we encountered weren't just presented by the wayfinding challenges described above - it was positively "clunky" to get a basic product and check out. An online store with the same problem would have a higher shopping cart abandonment rate...and we can assume brick and mortar stores are no different. My friend and I almost left without our purchase in frustration.

    In keeping with time tested best-practices, Customers shouldn't have to "work" to locate or examine merchandise. The easy fixes:
  • Place products within comfortable reaching distance, preferrably within a reasonably natural line of sight and arm's reach. For example, it would be relatively easy to use taller, or elevated accessory shelves and angle them in the floorplan to create the center-asile line-of-signt into the back of the room without negatively impacting the clean store design or real estate usage.

  • Get people in and out more easily. Beyond storientation, it was really a pain to check out in this store. The checkout line was serving as a customer service department (returns, IPOD service) and checkout. The irritated people in line mostly had simple transactions to conduct and were forced to wait in excess of 15 minutes to while faulty IPODs were replaced and special orders were created. Address long lines immediately to support both simple and complex transactions.

  • Collectively, this mini case study illustrates how important it is to continue to test and iterate the customer experience to improve outcomes and remove the pitfalls that impact customer loyalty. In the future as I peruse the malls and stores, I'll definitely compare these observations to other Apple stores, as I'm curious about the continuity of experience between them. That's all for today, though. ;-)

    Customer Experience Files: Working Out the Kinkos

    Yesterday, I spent some time at Fedex/Kinkos, trying to print out an 11x17 document on a high quality color printer. I was paying ten cents a minute to access the network and connect to the printer, plus a charge for each copy that ran through the printer.

    In line with Murphy’s law, the printer encountered a paper jam – and my print became locked in a vice grip inside the printer. I asked for some support, and a rather slow, dull-eyed employee came over to clear the jam. After clearing the jam, he mumbled something about trying it again and walked away. I tried again, only to get another, identical paper jam. I had to find him and ask for help again. Sighing, he came over and tried to fix the printer. He came to my computer and checked my settings. Told me to try again and walked away.

    Wash, rinse, repeat. This happened four times. On the fourth try, instead of resolving my issue with me, he walked away in the middle of things to help another customer and never came back. My clock had now been ticking in excess of 70 minutes, and he provided no suggestion, follow up or assistance to help me gain closure. I was thinking to myself, “At least tell me to go to Staples if you can’t get the printer to work!”

    I truly hit a dead end with the guy, and decided to go to the manager. I provided him with some gentle feedback, which he accepted graciously. He eagerly stepped up to the plate to make me a happy customer, got me the resolution I needed, and credited me for my time. He made eye contact, was responsive and apologetic about the dull-eyed associate's approach. He commented that he’d provide him some additional coaching to help him with future interaction.

    "Joe Manager" turned my experience around – for me, and for Kinkos, as any good manager should. He did it even though he was busy. He focused on me as if I were his only customer. He also followed up with the associate (I witnessed this later) which made me feel good about his committment to service.

    This is a small but effective example of how important having the right “frontline response” is, when customers inadvertently run into common experience pitfalls. We can't always have flawless experiences, but when we have the fundamentals in place, we can rescue experiences that go wrong with grace and success.

    Experience the Old & New

    I’m traveling again, which is why the posts are slim. Internet access is sporadic where I’ve been, and I’m using this as my excuse to make a true effort to unplug. Yeaah. Right.

    I flew via Madrid to Alicante Spain and then took a taxi to Altea to meet a friend from San Francisco for a little girl time and relaxation. On Friday night, we had a very late dinner at a small place called “El Perro Negro” downtown. A French man who spoke excellent English served us Italian lasagna, even though the kitchen had closed. Afterward, my friend Kelly and I jumped into a German taxi for a quick ride through the ciudad antigua (old part of the city).

    At its highest point, the view of the harbor is great, and a quaint city square branches off into narrow, well lighted streets full of quaint shops and cafes. In the city square, the blue cupolas of the cathedral blend with the night sky. Some of the streets in Altea aren’t wide enough for cars – and others just so.

    As we careened through the narrow streets of the village, I was more than mildly entertained by the fact that our brand new cab sported a very nice GPS system, which was doing an admirable job of plotting the maze of streets in front of us. Old meets new, local meets global. What a trip.

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    LEIGH DURST

    LEIGH DURST
    I’m Leigh Durst, a 20 year veteran in business, operations, customer strategy, ecommerce, digital & social media and marketing. Simply put, I’m a strategist that helps companies (start-up to blue chip) achieve business shift, create more compelling online and offline experiences. I also write, speak and teach about experience design and next-generation business. I’m a futurist, visionary, strategist, doer and connector with a passion for people and helping others. When I’m not on the road, you’ll find me in the San Francisco bay area, working, beaching it and hanging out with my family and dog.

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