Understanding your business context is essential to formulate a marketing strategy
B2B CMOs often have to create a long-term strategy for marketing. They can use some input from the corporate strategy, but not in complete isolation. CMOs must interpret both scenarios with caution. They are expected to make assumptions about the needs and expectations of the business. They could also compromise and develop a short-term strategy that is more similar to an annual marketing plan rather than a multiyear one.
It is easy to see where these strategies will lead. The strategy formulation process can create conflicting priorities and uncoordinated efforts.
We use the Forrester Market Strategy Compass to help clients overcome these obstacles. It is a step-by–step model that helps formulate a marketing strategy that aligns with the overall business strategy. This gives clarity and measures to ensure that marketing resources are contributing to the company’s growth.
The Marketing Strategy Compass includes 15 key decision areas, which are divided into three levels. The first is where CMOs and CSOs along with product leaders and other business leaders decide together where and how long-term growth should come from. These discussions result in a forward-looking, joint “destination” which informs the next level marketing decisions.
The second outlines two “orientations”. The first refers to the way the business appears to customers. The second is internal and describes how marketing will achieve the strategic objectives. The marketing strategy then descends to the third level, where marketing subfunction leaders (e.g. portfolio, field, demand market) create their own three- to five year strategies to support the decisions at the first two levels.
This best-practice approach provides CMOs with a solid foundation. However, how CMOs use the Marketing Strategy Compass in order to gain stakeholder alignment and get buy-in for their marketing strategy will depend upon their business context. CMOs can use six factors to determine their business context. This determination then guides CMOs in establishing critical interlocks that will guide them to make decisions across all levels and 15 key decision areas.
- Audience overlapHow closely do the audiences that your organization targets intersect? Are there different regions or divisions that are pursuing the same target segments or personas?
- Routes to the marketAre they different?
- Expectations of the customer:Consider your offerings and how you use them. These offerings are they diverse or uniform? This could be affected by regulations in different areas. Customers may have different expectations if you follow different regulations.
- Complexity of an organization:What is the structure of your company? Are you in a matrixed or business unit structure?
- AutonomyDo decisions need to be made by the individual or do they require consensus?
- Strategic imperativesDo you have any corporate-level initiatives that should be implemented over the strategic period.
Let’s say that a large software company has many business units. Each of these divisions operates in different regions. This is an example of how this could work. Each business unit has its own autonomy but they all share the same strategic imperative: increase revenue by investing in a portfolio that is corporate-wide. The business units should not be too narrow in their vision of the overall business strategy. Instead, they must consider trade-offs within business unit portfolios and invest at the corporate level portfolio to achieve long-term growth goals.
The internal and external context of the business would need to be taken into consideration when formulating a marketing strategy. This includes factors like audience overlap, multiple routes and customer expectations, as well as factors such a multiple route to market and multiple routes. This company was our example. We helped determine its external orientation. How it would appear to its audience, considering its brand positioning, segmentation and audience targeting, as well as its sustainable value over the long-term. We decided to move portfolio investment from the business unit-specific portfolio towards the corporate portfolio investment in order to drive long-term revenue for the corporation. The next step was to work with the client to establish an internal orientation. Based on the business units and regions, it was determined that establishing an internal content team would increase messaging consistency and productivity. Marketing leadership determined the roles, processes, metrics, and measures required to make this a success.
One of the main benefits that the teams discovered was a shared sense of purpose as the decisions were made down to individual marketing subfunctions. Each individual’s work was more effective and efficient when they worked together rather than in isolation to achieve the business goals.
This example is simplified — many decisions were made during the marketing strategy formulation process. It shows how context influences the business’s decisions regarding strategy formulation. While it takes time, it helps you avoid working in a vacuum. It also greatly increases the impact of all your marketing resources.