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Make It Feasible: Select the Right Solution

Every problem has a solution. You just have to be creative enough to find it.

TRAVIS KALANICK

Mr. Wang and his friends really enjoyed their safari vacation in Africa. Their Phantom 3 Advanced drone made by Dji brought them shockingly close to the zebras, giraffes, hippos, elephants, and even lions. Although still preferring the taste of Jingzhou draft beer at home, they had to admit that the ice-cold Castle Lager certainly added an exotic flavor to this tour. They could not wait to bring the breathtaking pictures of Africa’s wildlife back to families and friends in Handong. The fact that this vacation was financed by a bonus they had won from a recent performance improvement project contributed to the enjoyment as well. This was indeed a relaxing and well-deserved vacation.

Mr. Wang is the general manager of the Lincheng Branch of National Telecom, Inc. A project he and his colleagues conducted in 2018 more than doubled the market share of smartphones in an important market segment within six months. This project not only won an award from National Telecom but also demonstrated the value creation process of a marketing performance improvement project. It satisfied the payoff and business needs of the organization by delivering increased sales revenue, improved customer satisfaction, and intangible benefits of better brand equity and enhanced client relationships. This project showed that without significant additional resources invested, it is possible to improve marketing performance significantly with smart efforts and use of a proper methodology.

Lincheng is the fifth-largest city of Handong Province in Southeast China, which represents one of the high-potential markets of National Telecom. In 2018, Mr. Wang and his marketing team launched a marketing program to improve the branch’s business performance. In order to ensure business alignment, they started the project with an organizational analysis by reviewing the corporate vision, mission, and goals. The corporate mission of connecting people with the world and the key organizational strategy to expand business scale required the Lincheng Branch to continually increase its market share and service level in the mobile phone market. After completing the organizational analysis, they conducted situation analysis and examined the environmental factors both inside and outside the organization at the world, workplace, work, and worker levels. These analyses revealed multiple marketing performance gaps, including a market share gap in the top 500 enterprises market.

With the help of consultants, Mr. Wang and his team conducted a key value chain analysis, an analytical tool developed by Sinotrac Consulting Company in Beijing. The analysis identified the relatively low “effective employee contact rate” as a measure for improvement. The effective employee contact rate measures the ratio of the number of employees effectively contacted by National Telecom’s marketing team and the total number of employees in an organization. On average, the effective employee contact rate was only 20 percent, which was significantly below the 50 percent target. The key value chain analysis showed that closing this gap would help the Lincheng Branch achieve its market share goal of 20 percent. Mr. Wang and his team then conducted cause analysis using the behavioral engineering model (BEM) before considering multiple solutions to address this business measure and increase the effective employee contact rate. The cause analysis showed that the primary reasons for the low contact rate were (1) a lack of information about the organizational structure, employee characteristics, and needs, (2) a lack of resources and channels to communicate with the target employees, and (3) a lack of incentives to motivate channel partners for better coordination and cooperation. The team then designed a package of solutions, based on the causes, to close the gap.

To address the first cause, the team worked with salespeople to collect data and information regarding the organizational structure and employee characteristics. The team then developed a WeChat-based social media promotion method and trained the sales force to use it. In addition, the team worked with clients to embed National Telecom’s product introduction into the clients’ new employee onboarding process. Both solutions were designed to address the second cause. To address the third cause, the project team provided bonuses specifically designed for channel partners to motivate them to build good relationships with clients’ gatekeepers. Implementing these solutions increased the effective employee contact rate from 20 percent to 55 percent in six months, which led to significant improvement of market share. From January to June 2018, the market share of National Telecom’s mobile phone in the top 500 enterprise target segment increased from 11 percent to 25 percent, significantly exceeding the goal of 20 percent.

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In the last chapter, we discussed the strategic and tactical payoff needs of an organization along with the importance of uncovering the business measures that define those needs. After discovering the “why,” the next step is to design or select the proper solution or solutions to address the issues, close the gaps, and take advantage of the opportunities. In this chapter, we will focus on the steps of cause analysis and solution selection. Solution selection is a serious matter. Choosing a wrong solution will not solve the problem or improve the performance but will waste resources and perhaps tarnish the image of the marketing function. In that sense, a wrong solution is worse than no solution. Even if the senior executive requests a specific marketing program as a solution, it is the marketers’ responsibility to ensure that the solution is appropriate because the marketing team will be eventually evaluated on the success or failure of the program. The design thinking principle of this step is “a mindset for curiosity and inquiry.” We use two performance improvement standards to guide our analysis. Specifically, in this chapter, we conduct analysis to (1) “Determine Cause” and (2) “Design Solutions.”

As marketers, we have quite a few tools available in our toolkit to make a difference. To increase sales revenue, we may develop new products, modify pricing strategies, choose additional distribution channels, or conduct digital and social media marketing promotions. Alternatively, we may target different customer segments, modify positioning statements, and choose new differentiation strategies. Further, we may train the members of our staff to improve their productivity, change their working habits, or equip them with new tools, resources, skills, and knowledge. Additionally, we can modify compensation schemes and evaluation policies to motivate salespeople. All of these may serve as solutions, but which of them should we select? Without a good understanding of the situation, the best answer we can provide is that we do not know.

Before selecting any major solutions, we need to conduct various analyses to identify opportunities, define problems, and explore root causes. No matter which solution we choose, the choice should be justified with evidence and considerations of both expected business impact and the costs of the solution. In the story of National Telecom, the organization chose to implement solutions focusing on the business needs identified by the key value chain analysis in order to close the gaps and satisfy the strategic payoff and business needs. These solutions generated positive results and added significant value to the organization.

Action Needs

With marketing performance gaps identified and business needs defined, the next step is determining what actions are needed to improve the business measures targeted by our marketing programs. By definition, a marketing program is a set of activities carefully designed and coordinated to achieve objectives at different levels. Action measures describe the extent to which customers, employees, sponsors, or others adopt new behaviors, change existing behaviors, and take desirable actions as expected by a marketing program:

•   In the business-to-consumer context, action measures could refer to the extent to which consumers download a new smartphone app, try out new running shoes, or visit a retail store because of a new TV commercial.

•   In the business-to-business context, action measures could refer to the extent to which an organizational buyer sends requests for proposals (RFPs) or adds the organization to its approved vendor list due to recent promotional efforts.

•   In the internal marketing context, action measures could refer to the extent to which employees apply the new skills they learned and knowledge they acquired in everyday work, after attending a training session.

In all three scenarios, the action measures themselves are not business outcomes. However, without these action measures, marketers are unlikely to achieve the desired business outcomes. On the other hand, although the action measures are no guarantee of marketing program success, they certainly build a solid foundation upon which success can occur. Analyzing and understanding the action measures establishes a chain of impact to assess the effects of our marketing program on business results.

As discussed in Chapter 3, we treat action needs as gaps in the current and expected levels of activity performance of a marketing program. In the process of designing marketing programs to improve and demonstrate value, the action needs of the target audience deserve attention and scrutiny. Specifically, analyzing action needs enables us to understand what caused the business measures to miss their marks and not be where they should be.

Analytical Techniques

One approach to assessing action needs is to use one or more analytical techniques as listed in the Box 4.1. Details of these techniques can be found in many references.¹

Some of the techniques listed in the box are data-driven, and others are based on subjective assessments of managers and researchers. No technique is superior under all conditions, but some are more appropriate than others under certain conditions. Marketers may consider using multiple methods for better analysis outcomes.

Learning Needs

Action needs uncovered in the previous step always require a learning component. Customers and others must learn what to do to take action. In the business-to-consumer context, consumers do not download our new smartphone app, probably because they are not aware of this app or simply do not know where or how to download it. In the business-to-business context, the organizational buyers do not send us RFPs because they have not learned the unique benefits of the offering. Similarly, in the internal marketing context, when sales teams fail to apply a new skill taught at a training session, the reason may be they do not know how to use the skill in their work environment.

In marketing, we use learning to inform, to motivate, to teach, or to change the attitude and behavior of a target audience. The target audience, based on the contexts, could be consumers, organizational buyers, or employees and partners. In some cases, learning is supporting another solution such as a promotion campaign. In other cases, learning itself becomes the principal solution, as in learning new product knowledge, new selling skills, new technology, or a new system. Sometimes, learning can be a minor solution and often involves simply understanding the product, service, pricing, market position, or benefits. Additionally, learning can be the starting point of a major positioning campaign to build brand equity. In summary, we do not always need a learning solution, but it is safe to say all solutions in marketing have a learning component.

Reaction Needs

The final level of needs analysis of the alignment model is based on reaction, which is the starting point of an information processing process. As Steve Jobs mentioned, the marketplace is very crowded and noisy, as so many competitors are trying to get customers’ attention. If our marketing program does not generate a positive reaction to get people’s attention, we do not stand a chance for them to learn who we are, take action, and have them purchase our products and services. Box 4.2 shows the typical reaction needs from the perspective of the audience, who can be the consumers, customers, and participants of our marketing program. These stated needs define the parameters of a marketing program in terms of its value, necessity, and convenience. Some of the attributes such as “cool,” “fascinating,” and “interesting” are more related to business-to-consumer marketing programs because consumers tend to rely on subjective and emotional attributes to make decisions. Organizational buyers tend to use objective attributes such as “informative” and“compatible” with current systems. For internal marketing programs such as sales training, participants prefer programs that are “meaningful,” “useful,” and “easy to use.”

Determining Causes

Cause analysis serves as the bridge between the gaps identified and the solutions that will eliminate the gaps. It determines why the gaps exist. Just as a doctor needs to diagnose before prescribing, marketers need to identify root causes of a gap before selecting a solution. Too often, marketers are overly confident in their own diagnostic ability and move directly to solutions after identifying gaps and opportunities. This practice may create problems because the gaps are simply symptoms, and the same symptom may be caused by multiple causes. Solutions based on wrong causes will not solve the problems but will cost resources. Without a solid understanding of causes, the choice of solution is flawed. A systemic approach is therefore needed to conduct cause analysis. We can use the following steps to conduct a cause analysis:

1.   Generate as many potential causes as possible. Potential factors and drivers exist in the environments affecting the outcomes of our marketing programs. There are also human factors influencing execution and implementation of the programs. Generating as many potential causes as possible ensures that we examine many sides of the problem and increase the chance of finding the true, root causes.

2.   Classify the causes by determining where they originate. The causes may be external or internal, related to strategies or tactics, or occurring during planning or implementation stages. Figure 4.1 shows a framework of the 12 Elements of Marketing Performance Causes. This framework originates from Rothwell’s environment model, which categorizes the environmental forces into four levels.² The world, workplace, work, and worker environments influence the outcomes of marketing efforts by either sustaining or obstructing actual marketing performance.

FIGURE 4.1 The 12 Elements of Marketing Performance Causes

•   At the world level, there are three components: factors related to customer, factors related to competition, and factors related to political, economic, social, and technological (PEST) forces. Out of the three components, the customer is the key consideration because the customer is always at the core of marketing strategies and programs. All three components are beyond the control of marketers, but they all have significant impact on marketing programs and therefore deserve attention.

•   At the workplace level, the three components are factors related to marketing strategy development. The first component is company, which includes factors such as vision, mission, and goals. The second comprises factors related to marketing segmentation, targeting, positioning, and differentiation strategies (STPD), as well as the four marketing-mix elements of product, price, promotion, and place (distribution), or the 4Ps. Out of the three components, the marketing STPD strategies should be the focus. They are the marketers’ responses to the factors at the world level. They must be consistent with the mission and goals of the organization and provide guidance for developing the marketing-mix strategies.

•   Both the work- and worker-level factors are related to marketing strategy implementation. The six components originate from Thomas Gilbert’s behavioral engineering model; these components are modified by Chevalier and Binder to be more manager-friendly.^3,4,5 The model contains six cells. The three cells at the work level: resource, expectation, and incentive, represent the system. The other three cells are at the worker level, representing individuals’ skill, motivation, and capacity. We will discuss details of the BEM analysis in the next section.

3.   Prioritize the causes according to their impact. Although the effects of the causes may differ from situation to situation, the higher the levels are, the stronger the effects they have on the marketing programs. In general, the macro factors such as economy, competition, and government regulations have tremendous impact across the board, but they are out of the control of marketers. We need to carefully consider their effects and adjust our marketing strategies accordingly. The priority of cause analysis also differs with positions and the responsibilities of the marketers who conduct the analysis. For marketing managers and product managers, strategy planning should be considered before strategy implementation. However, if you are a manager who is in charge of marketing strategy implementation, for example, a sales director or a customer service director, you need to first consider the work-level factors such as setting proper expectations, providing appropriate resources, and offering incentives before considering individual factors such as employee knowledge, skill, motivation, and capacity.

4.   Determining and verifying root causes. Various tools are available to determine the root causes of business and action gaps. Common tools used by performance consultants and marketers were presented earlier in Box 4.1 and include interviews, observations, surveys or questionnaires, focus groups, and analytical approaches. In addition, marketers may verify causes by discussing the concern with colleagues and stakeholders and by asking who, what, when, where, why, and how questions.

If you pit a good performer against a bad system, the system will win almost every time.

GEARY RUMMLER AND ALAN BRACHE

Causes Related to Strategic Planning

Many organizations use a strategic marketing process to allocate marketing-mix resources in order to reach target markets.⁶ The planning phase of the process involves analyzing external and internal environments in order to determine the STPD strategies and the marketing-mix elements, the 4Ps. Typically, professionals who are responsible for the strategic planning phase have titles such as marketing director, marketing manager, product manager, etc. In many industries, these professionals are treated as representatives of the marketing function.

In Figure 4.1, the top two levels correspond to the strategic planning phase. The three world-level components—competition, customer, and the PEST—are external and beyond marketers’ control. At the workplace level, the first component is company, which includes the organization’s vision, mission, and corporate goals, and is also beyond marketers’ control. In order to accomplish marketing objectives, marketers need to focus on the components under their control, the STPD and marketing-mix components, but at the same time pay attention to the components beyond their control. In other words, instead of worrying about factors beyond their control, marketers should focus on adjusting their STPD strategies and making marketing-mix decisions as responses to the changing factors beyond their control.

Causes Related to Strategic Implementation

After developing the marketing program, the next step is to implement it. The implementation phase of the process puts the plan into action and executes strategies to reach desired goals. This phase involves obtaining financial and human resources, defining tasks, and executing marketing programs. Professionals who are responsible for the implementation phase have titles such as sales director, sales manager, distribution manager, promotion manager, client manager, account manager, etc. In Figure 4.1, the bottom two levels correspond to the strategic implementation phase of the marketing program.

The six components of these two levels are from the BEM. According to the model, the six components (or factors) are significant influencers on the job performance of individuals who implement marketing programs. Researchers and managers agree that the magnitude of the influence on job performance is generally higher for factors at the work level than those on the worker level. One study conducted in the United States showed that 75 percent of job performance is influenced by the work-level factors, whereas 25 percent of job performance is influenced by those at the worker level.⁷ These numbers are generally stable across industries and job positions. Table 4.1 demonstrates a cause analysis tool focusing on factors related to each of the six components of the behavioral engineering model.

TABLE 4.1 Cause analysis for marketing implementation

Determining Solutions

After identifying gaps and conducting cause analysis, we are now ready to develop solutions. Marketers should develop their solutions according to the causes and with a focus on closing the gaps or taking advantage of the opportunities. We recommend the following four-step approach to systematically determine solutions.

Step 1. Generate Potential Solutions

The term “solution” refers to solving a problem or exploiting an opportunity in order to improve marketing performance and help the organization achieve its strategic goals. It typically involves taking conscious and deliberate actions that facilitate a change according to the causes identified in order to address the gaps and needs revealed at different levels. Depending on the specific causes, marketers may choose solutions associated with the planning phase or implementation phase. They may modify a strategy or change a technique. They may choose a single solution to solve a problem or a package of solutions to address different aspects of the problem. Marketers need to consider the following principles when generating solutions.

Solutions Are at Different Levels

As demonstrated in Figure 4.1, marketers may choose solutions at different levels. Specifically, marketers may choose strategic solutions at the workplace level, the work level, and the worker level. If the causes identified are primarily at the world level, such as changes in competition intensity, customer preference, technological breakthroughs, or governmental regulations, then first consider solutions related to the STPD. Marketers may need to target a different customer segment or change their positioning and differentiation strategies. The STPD strategies may also be appropriate if there are changes associated with the organization. For example, if the company develops a new organizational goal after acquiring another organization, then it is possible for marketers to adopt different segmentation strategies. If, on the other hand, marketers determine that the STPD strategies are appropriate, then they may choose solutions related to the marketing-mix elements, including the 4Ps.

If the causes identified are primarily at the work and work levels, we may conclude that the issues occurred during the implementation phase. As discussed in previous sections, the factors may be related to one or more of the bottom two levels of Table 4.1. As shown in Table 4.2, there are potential solutions corresponding to each factor. This list is by no means a comprehensive one, but it is a starting point for solution development. Please note that some solutions appear more than once because they may serve multiple purposes.

TABLE 4.2 Potential solutions for marketing implementation

Solutions Should Be Selected at the Highest Level First

As we discussed in the cause analysis section, the impact of each factor differs. Some factors are significantly more powerful than others. Those issues causing most of the problem therefore demand the most attention and perhaps even the most resources. They are also the highest priority, because if we take proper actions, they are much more likely to generate positive results with little or no additional investment. Generally, the higher the level is, the more powerful a factor is. For example, changing the STPD strategies of a firm will have much stronger effects on marketing performance than changing the 4Ps of the marketing-mix elements. Similarly, changing one or more of the factors at the work level, for example, providing resources and tools, will be easier and more likely to generate positive results than changing employees’ attitude, which is at the worker level.

When a Higher-Level Solution Is Selected, Changes Must Be Made at Lower Levels

The higher-level solutions generally refer to the strategic actions taken at the workplace level, and the lower levels are actions at the work and worker levels, as shown in Figure 4.1. For example, if marketers determine that the right solution is to target a new customer segment, then after adopting this strategy, marketers need to change the product packaging, modify price, or even choose different distribution channels. In addition, marketers need to work with sales management to set goals, provide resources and tools, and change incentives, all three at the work level. Further, marketers may need to train salespeople and equip them with new product knowledge or selling skills to serve the new segment, which occurs at the worker level. However, when a lower-level solution is selected, it is not necessary to make changes at higher levels. For example, when a sales manager decides to have a sales contest program to motivate her sales force, marketers do not have to modify their marketing strategies as long as the strategies are appropriate.

Step 2. Match Solutions to Needs

The most important and difficult part of the process is to match the solutions to the needs at different levels for different causes of the problem. This task is both art and science. We recommend the following principles for marketers to follow that will ensure alignment.

Some Solutions Are Obvious

Some causes are obvious as they point directly to a solution. If consumers prefer purchasing your product online, then making the product available online is the obvious solution. If salespeople need updated marketing brochures for their sales calls, then updating marketing brochures is an appropriate solution. Certainly, there are still design issues to attend to, and we will discuss those issues in the next several chapters, but the solutions themselves are relatively obvious in these situations. Consider the following case.

Case in Point An inbound call center of a large manufacturer was trying to improve its marketing performance.⁸ Representatives of the call center provided technical support, handled repair inquiries, and answered billing and general questions for current and prospective customers over the phone and online through live chat. However, managers were not satisfied with the representatives, and the focal gap was on customer performance. Specifically, less than 70 percent of the customers who called the center were satisfied, whereas the managerial expectation was at least 85 percent customer satisfaction. Managers conducted a top-performer benchmarking analysis and found that the actions of top performers differed from the actions of average representatives. Top representatives had much higher numbers on the following measures than the average representatives:

1.   The number of times a representative mentions the customer’s name during conversations

2.   The number of times a representative is able to provide a target date for problem resolutions

3.   The number of times a representative answers questions by following the call scripts from the training manual

Based on these results, managers quickly developed an internal marketing solution consisting of training, coaching, and incentives. The call center achieved its customer satisfaction goal within three months after the solution was implemented.

Solutions Can Come as a Package

In marketing, more than one solution typically exists for any problem. The solutions can come in different sizes and sometimes may come as a package. When you are able to solve the same problem using different solutions, you see the beauty of marketing creativity. However, this can be a challenge when you are facing a full range of possibilities and dealing with all levels of complexity with the solutions. For example, if your customers have expressed a need for better service quality, the solution could range from improving the physical shopping environment, to changing the shopping process, to providing prompt service, to training employees to be more responsive or show more empathy. Some programs are more expensive than others, and their effectiveness varies.

Additionally, we need to note that when we choose a high-level strategic solution, changes may be needed downstream. For example, if we decide to target a different customer segment, we need to make appropriate changes to the positioning statements, product package, pricing policy, distribution channels, and promotional messages accordingly. This way, the solution is an integrated package instead of a single item. It is also helpful to understand what would be considered an acceptable solution, recognizing that not addressing the issue at all—in other words, taking no action—is one solution option. No matter which solution we choose, or do not choose, the considerations should focus on benefits, costs, and, eventually, values and contributions of the different options.

Some Solutions Take a Long Time

Although some issues respond to a short-term fix, such as training salespeople to be more effective in closing a deal, others take a long time to rectify. For example, if consumers are reluctant to purchase because of the public image of the organization (bad word of mouth, recent negative events, tarnished brand reputation, etc.), it could take a long time to repair the situation. The solution to rebuild brand equity would have to start at the top of the organization and go throughout the entire organizational process. Another example could be that an organization recognizes a new growth opportunity and decides to reposition its brand. The repositioning solution could take months, if not years, to take effect and change the perceived brand image in consumers’ mind.

Step 3. Select Solutions for Maximum Payoff

After matching solutions to needs, the next step is to make sure that we select solutions with maximum payoff. Specifically, we need to consider two major issues that can affect that payoff: the cost of the solution and the monetary benefit from the implementation. As discussed in previous chapters, we define value as the ratio of benefit and cost. To achieve maximum payoff, we need to consider both benefits and costs. From the cost perspective, the smaller the cost, the greater the potential value and payoff. From the benefit perspective, the greater the benefit, the greater the potential payoff.

Step 4. Verify the Match and Ensure the Success of the Solution

After identifying possible solutions, marketers must verify that a match exists between the need and the solution. It is often helpful to review the needs identified at different levels and return to the source of input (focus groups, employees, etc.) to affirm that the solution meets the need. Marketers may want to review the strategic payoffs and business needs to ensure the solutions are aligned with them. During the process of initial implementation of the solution, obtain feedback to see whether the solution is indeed a fit as expected. Early feedback can prompt adjustments that need to be made or, in worst-case scenarios, suggest abandonment of the solution altogether. Taking corrective measures, if the solution is not working toward the early objective, can avoid a big surprise at the end of the implementation process. In addition, marketers may analyze the feasibility and workability of the solution by examining resources available and employees’ skills. Both employee involvement and managerial support are important to ensure the success of the solutions.