Sweet Spot Organizations

Arun Sinha, author of "Sweet Spot: How to Maximize Marketing for Business Growth", is Chief Marketing Officer of the $5 billion American company, Pitney Bowes. He shares his thinking on 21st Century marketing with Des Dearlove.

The nature and emphasis of marketing appears to have shifted. How important is it now for marketers to adopt more rigorous, analytical approaches to their activities?
Gone are the days when you create marketing materials for the sole purpose of winning awards! Marketing is no longer warm and fuzzy exercise for some intellectuals in an organization. It is a well demonstrable business approach that can be measured very effectively.

I remember, when I first started in an advertising agency about 20 years ago, we were very concerned about building our creative portfolio and secondarily on the market results. Things have changed for the industry and now we are obsessed about how to get the Return on Investments from our marketing programs.

Marketing has become a wonderful combination of art and science where you employ the rigorous and analytical approach to marketing activities. Marketing effectiveness is measured by Return on Investment , Customer Loyalty, Customer Lifetime Value, Brand Awareness, media effectiveness, campaign response rates, and a host of other measurements.

Q.Where did the phrase "sweet spot" come from?
A. In thinking about tennis players whose performance is so extraordinary that people think their rackets have extra-large "sweet spots," it dawned on me that many sports figures have periods in their careers that are packed with victory after victory. Then I started thinking about Starbucks, Apple, Google, Fedex, Best Buy and companies on that level. They, too, seemed to have long stretches of success. I wanted to know why.

Q. What did you discover?
A. Well, it was not easy to jump from my sports analogy to a list of companies that could be judged to be enjoying a business sweet spot.

First, I just started naming companies I liked, as a professional marketer, as a customer, or just as an admirer. One of the first companies that came to mind was the educational toymaker, Leapfrog. A very impressive company. I also liked the JetBlue airline.

But, no matter what company I named, I had this problem: How could I prove it was enjoying sweet spot status?

Q. What, exactly, is sweet spot status?
A. In business, a sweet spot is a place, time, or experience in which a company's brands, products and services, finances, leaders and marketers are in tune and in time with consumer needs, aspirations, and budgets.

That's exactly what I said in the book, and I believe it just as strongly today. I've been searching for the companies in which everything inside the company is aligned with the factors outside the company that determine acclaim and success.

Q. Have you actually put these ideas to work at Pitney Bowes?
A. Yes, they have been central to my work at Pitney Bowes. When we first embarked on transforming Pitney Bowes' image, we created a strategic architecture starting with the objective by audience and then a measurement system to assess if we were moving the needle.

I had to get in front of the senior management, CEO and the board to convince them of the value of marketing and how we will show the improvements. The strategic architecture outlined what we will expect in the year 2007 and the improvements that will be made year over year. Without good metrics and measurement system of the marketing effectiveness we would not be able to show the progress.

Q. What can marketers do to get the ear of the CEO?
A. We need a revolution of thinking among the marketing professionals. We need to take charge and educate the C-Suite on the value of marketing.

I think that the CEO is – or should be -- focused on creating three types of values: 1) Shareholder Value 2) Customer Value and 3) Employee Value.

Marketing needs to own customer value completely. We need to build a good customer value proposition which results in meeting the wants and needs of the customers. We need to get out of the comfort zone of building just the best marketing communication, and venture into the world of creating growth strategies deeply rooted in customer insights.

Second, we need to have a rigorous approach to marketing and reduce the unknowns as much as possible. The unknowns can be greatly reduced by rigorous test marketing and piloting a solution or testing the marketing communications. Once we step up to this challenge, the CEO will take notice.

The pressures on marketers – from their boards and from consumers – appear to have intensified.
There's no doubt that today's business demands more for less. Every marketing person goes through this stretch. When we go through our budget allocation, it is expected that we will do more with the same resources. At the same time, consumers want more products/services/solutions from the companies for the same price if not cheaper.

Q. So, how do you break through this cycle?
A. One of the ways is to constantly innovate. Innovation in the areas of products, process and technology. Continuously evaluate what we are doing from marketing perspective and how to make it more efficient and effective. Continue with the programs that are providing the highest return on investment and walk away from the ones that are not yielding the same value.

The real challenge, however, is to balance the short term with the long-term goals. In a zest to do more for less, very often the long-term goals like brand building process takes a secondary role to the short term return from promotional programs. It helps to have a CEO who understands the value of brand.

We are especially fortunate in this area that our CEO, Michael Critelli, really understands the value of building a brand and he has been a steadfast supporter of marketing when it comes to building long term value.

Q. And, finally, a 30 second book summary?
A. Here's the ultra-short version. A Sweet Spot company has to:
Move the marketplace in new directions,
Become an alluring investment,
Be willing to out date itself by rejecting its past successes and innovating in new directions,
Have people buzzing about it,
Be a competitor by inviting others to move the entire industry upward,
Spark what I call Z-leadership, a company-wide and company-deep level of enthusiasm that you can feel just by dealing with any of its employees, starting, of course, with the CEO.

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