The Marketing “Nugget” of Business Strategy

John McKay thinks that and marketing people and advertising agencies blew it in the 1980s.

John’s the senior account director at Introworks, a Minnetonka marketing company whose work is divided about evenly between the medical, high-tech, and financial-services sectors.

So how did marketers shank it? John’s take: In the ’80s, marketers began to get relegated to business’s children’s table. They created funny commercials and glittering messages and won creativity awards—but the C-suiters treated them more and more as giddy kids. Instead, top management called in big-time consulting firms like McKinsey and Anderson, who gave them expensive advice with the air of profound grown-up seriousness. They wrote serious reports with serious-looking charts. Meanwhile, the marketers focused on “hey, dude, that’s cool!”

“Marketers should be at the table,” John believes. They know (or should know) the customers. They know (or should know) what moves them. They should do cool work, yes (and Introworks does do cool design,). But not cool for cool’s sake. Their efforts, if done right, can be the difference between a successful campaign and something more along these lines.

And particularly for med-tech firms introducing a new product, customer information (data-driven and intuitive) can determine whether it gets attention in the emotionally and physically intense marketplace of hospitals, clinics, and patients—or disappears in the back of a hospital’s closet shelf, no matter how elegant the design or how attractive the marketing materials. Introworks says it’s been involved in 50-plus successful medical device launches—the 12-person shop knows whereof it speaks.

One of its newer clients is Kansas-based KCBioMedix, which is introducing a device designed to help preemies better “learn” the swallowing and sucking capabilities they need to move to oral feeding.

The standard approach to this is to have neonatal ICU (NICU) nurses do physical-therapy types of activities like sticking their fingers in the baby’s mouth to encourage sucking. It’s something many nurses (in a sense) like to do, and why not? You’re helping save a baby’s life, and in a very intimate way.

Not to say that the following is true about KCBioMedix, but the thing about smaller med-tech firms is that they’re typically founded by brilliant engineers who tend to think logically: If I build a device that saves providers money and offers patients a better treatment than what’s currently on the market, of course hospitals and doctors will want it. So all we need to do is get an appointment with the CFO, show him or her the clinical studies, and ring up the sale.

Makes sense. But as Introworks knows from experience, that’s not often not what happens. As company president and cofounder Bob Freytag puts it, “the question is, what’s the issue, not the product.”

In the case of KCBioMedix, the issue is, would the nurses and NICU physicians want what it’s selling? They already have techniques in place—why use an expensive new device? Especially if they’re proud of the techniques they now use? With a new device, if you don’t have buy-in from medical staff, the CFO isn’t likely to buy.

With a new product, John observes, you have to appeal to emotion, too. Informed emotion, if you will. In the case of the NICU nurses, you’d need to approach them directly and appeal to the fact that this will not only save babies’ lives, but also get them more quickly where they belong: in the arms of their mothers.

Bob calls this type of customer knowledge the “nugget”—the deep-down market understanding a company needs to position its product for launch. And to his mind, marketing people need to be in on the product discussion early—to ensure that strategy, company staff, product naming, marketing materials, and market knowledge are in alignment.

As John McKay notes, “What we do is more business consultation, not “let’s make something cool.’ ” Improving a company’s business practices, both internally and externally, can be cool enough.

BTW: Magnet 360, a Minneapolis-based network of marketing-related agencies, has launched a competition for $100,000 in free services to companies looking to improve their online marketing. Companies selected for the Challenge (application info here) will have new landing pages built by the designers and marketing mavens of Magnet 360. According to Magnet 360’s Scott Litman, the inspiration for the Challenge was discussions with marketers frustrated that their companies’ Web sites and related media were not sufficiently translating visitors into sales leads. I’m guessing what this initiative is addressing is that more and more companies are realizing that the Web site is becoming the hub of their sales efforts—but are still learning how to take advantage of that fact.

Notes From the Road

Taking a break from the local creative trail for a week (I’m back on the road next week). Three bite-sized mini-posts instead:

1. Most of the “new-marketing” firms I’ve talked to the past couple of months aspire to be some kind of variation of IDEO, the Bay Area–headquartered firm that conjoins strong design, creative thinking, business practices, and marketing consulting in a richly unsiloed way. (IDEO’s Web site is an intellectual and visual Thanksgiving feast.)

The local firms I’ve posted about also aspire to be more than old-school creatives. They seek to be design and business thinkers. And they’re all pursuing that business model in distinctive ways:

• Zeus Jones, for instance, has a strong emphasis on design and retail environments.

• Interval works with health-care providers to improve how they deliver services, seeing those improvements (rightly) as fundamental to their marketing efforts.

• Catalyst Studios unites animation and interactive design with insights into how a client company can tighten up its internal processes.

Firms like these—they’re not “agencies”—are offering practical visions of the ways successful businesses of the future will operate.

2. Someday, someone will write a good business history of Polaroid, one of the great American industrial innovators of the postwar era. It was a great design firm as well as an inventive manufacturer. Such a book would have a lot to teach about entrepreneurial creativity arises, and how it fails. It could even be a great snapshot history (wordplay intended) of American business during a golden age. Polaroid’s still around, but it’s been exiled far from its glorious throne.

Until that book is published, here’s something to help tide us over: a fine little slideshow (with entertaining embedded videos) that shows what happened to Polaroid, and why its downfall was so fast. Many of the insights are surprising, even counterintuitive. (Polaroid actually was an early adopter of digital photography. But...)

3. The blog links on the right-hand side of this page have been updated. Most are local—all are worth mental exploration. Discover.

Thinking Ahead on Health Care

Health care marketer Chris Bevolo has strong opinions:

“Joe Public doesn’t care about your hospital.”

“Hospitals, when they think about marketing, talk about ‘benchmarking.’ That means: ‘The hospital down the street is doing that—we should do it, too.’”

I’m making him sound like an irascible old geezer, a Tareyton wobbling irritably from the corner of his mouth. In fact, Chris Bevolo is an affable, thoughtful Gen-Xer. He runs Interval, a Warehouse District marketing and branding firm whose clients are primarily hospitals and clinics, mostly in the Upper Midwest. He also speaks and writes extensively on health care marketing. (Founded in 1999 as GeigerBevolo, a more traditional graphic-design and branding shop, his company became Interval in November 2008, a couple of years after it chose to focus on health care marketing.)

So, um, Chris, you still have clients? He laughs: They’ve heard it. In fact, he wants them to hear it. And apparently, it doesn’t deter them from working with his firm.

When 150–year-old St. Joseph’s Hospital in St. Paul, which had been doing major renovation, wanted to show that it had undergone a transformation, Interval created a series of patient documentaries positioned to resemble first-run movies. During the first month of the campaign (seen on the sides of buses and on billboards), the word “hospital” didn’t even appear. The campaign has since won numerous health-care marketing awards.

But the projects that especially appeal to Interval are those where marketing intersects with how a hospital or clinic interacts with patients.

In 2004, North Memorial Medical Center opened its new heart-care clinic for women. Heart screening is typically not covered by insurance. So how to encourage women not only to get screened, but also to improve their heart health?

Interval developed personalized journals entitled “MyHeart Book” that include the results of each patient’s tests, educational information, and specific ways to improve, like dietary tips and stress reduction techniques, as well as encouraging them to follow up with staff. Patient response to the program was so strong that North Memorial soon expanded hours and staffing. And the MyHeart journal helped convert a scary or at least unappealing prospect into a positive experience.

(An Interval project on the guy side, designed to get more men to sign up for organ donation—Half the Men.)

Why do hospitals and clinics resist improvements in how they operate? You could ask: Why do organizations in general resist real change? (Some thoughts on that here.) In the health care world, Chris believes, an additional roadblock is that medical staffers are swamped. Being pushed to change the way they work can add more stress to what is already a high-blood-pressure vocation.

Hospital and clinic marketing staffers are more likely to “get it,” Chris observes. But there aren’t many opportunities for them to push for it. Most are encouraged, even required, to stick with traditional mass-comm messaging, typically resulting in a mushy snack cake with a mysterious cream filling, liberally sprinkled with glittering generalities. Examples from Chris: “We’re a hidden gem.” “If patients only knew our story.” “We really like our nice new heart wing.”

In other words, many health-care providers seem to believe that they, not patients, control how they’re perceived.

But as Chris notes, people don’t particularly want to go to the hospital. And if they’ve had an unpleasant experience, if staffers have treated them like downed cattle, then all the shiny-happy-people images from all the stock-photography CDs in the world aren’t going to change what those patients tell their friends.

“Fifty percent of health care marketing is wrong,” says Chris, also noting that health care is a highly complicated industry, where suppliers generally control demand, and people typically can’t “shop around.” It doesn’t follow business-to-consumer rules.

So why should its marketing follow the same rules? His point exactly.

BTW: I won’t be able to attend The Show, the Minnesota Ad Fed’s awards gala the evening of Friday, October 23. But I can dig its Web site, and do. Augmented reality, mind-bending colors, the Hamm’s bear (drinking Summit?)—it’s all there. How shall I praise it? As an all-night rave for the eyeballs. An interactive acid trip, without the pesky side effects of real LSD. Both good things, by the way.

The credits: Carlson Marketing’s Door C division for the site design, Analog for the augmented reality, Brent Schoonover for the illustrations, and Ratchet for the behind-the-scenes technical that’s on beyond Flash.

Thinking as Marketing

Betsy Treinen believes that right here, right now is the most exciting time in her marketing career. “Everything is changing,” says the director of client services of Minneapolis-based Catalyst Studios. Let us count the ways: Business models, how businesses interact with customers, interactive technology, doing more with less money—all are challenging clients and marketers to change the way they do their work. Even if some companies have to be dragged there kicking and screaming.

If marketing agencies (advertising, design) are evolving, Catalyst offers one model of that. Like Zeus Jones (discussed here last week), Catalyst eschews the “A-word” (i.e., agency). The term can suggest a goofy-clever gun for hire rather than what many “new marketing” firms seek to be: a thoughtful, active collaborator in helping make a product or service succeed.

And like Zeus Jones, Catalyst hasn’t quite come up with a name for its species. (Marketing and design strategy company, maybe? Okay, a little long.) But it is clear on what it does—as Betsy puts it, “not advertising but problem solving.”

Founder Jason Rysavy started Catalyst primarily as a graphic and Web site design shop in 1999—his first client was Target. Catalyst quickly grew as it took on more and more work with big brands. Many are still with Catalyst, notably Best Buy, Kohl’s, Medtronic, (and Target). Over time, he saw that simply producing materials was not a long-term growth strategy for his shop. (It was also getting way too competitive—too many designers chasing less and less work.) Particularly in the last few years, he’d seen clients’ needs shifting a bit from traditional media into new directions. So he decided to focus the company entirely on interactive.

And he decided he wanted to do more than simply design stuff. “We want to help companies to think more—to think more strategically about their marketing, but also their products, their packaging and their processes,” Jason says.

As interactive technologies change the ways brand messages are being received—in short, much more critically by “consumers,” who are less and less prone to being passive receivers of glittering marketing generalities—and with corporate marketing staffs being downsized, the “skeleton crews” that remained needed outside marketing consultants who could provide not just “creative” but also “strategic.”

To help build that kind of company, Jason—who says he likes to hire “people who are smarter than me”—began several years ago to bring in heavier-hitting talent, starting with Betsy, who’d worked in brand strategy with several agencies in town, most recently Peterson Milla Hooks, the Minneapolis shop largely responsible for the “Target Look” in the 1990s in print and TV advertising.

Besides Web sites, Catalyst’s specialties include game design, social media, and what it terms “motion.” (Check out its portfolio here). It also has done what Jason calls “less sexy” but still strategically useful projects, like developing internal process applications, which deal with anything from automating the management of digital assets to restructuring entire job flows and reinventing how a company manages its vendor negotiation processes.

The projects that particularly interest Catalyst are those where a client’s ideas haven’t quite jelled—and that tend to fall between the cracks. “We’re often brought in to deal with a bastard child,” Jason says. “Many times our job is to tell clients what they don’t need.”

Case in point. Kohl’s wanted to recruit higher-quality marketing talent via its Web sites. Kohl’s came to Catalyst, saying, “Can you make us a sitelet to help us recruit in this one category?” Catalyst said, basically, Um, okay, but the problem is bigger than that. A sitelet would simply be one more in a stable of recruiting sites that were all over the place in terms of design and messaging.

Catalyst instead developed a strategy that stepped back and approached the challenge in a broader, more global, more branded way. The look changed, but more importantly, an entire employment brand was born, a place the client hadn’t even thought to go. The various sitelets were pulled together under one umbrella, the employees were brought in as “evangelists” via video, and the various office locations began to look like parts of a seamless whole.

Jason notes that it’s difficult to convey this “marketing think-tank” approach on the company’s Web site. How do you portfolio-ize thinking? How do you communicate the idea that people are less and less passive to marketing messages, and are looking for better products and more useful information about those products?

“Over time,” Jason believes, “there will be less tomfoolery in marketing. Risk taking, yeah, by all means. Experimentation even, as technology pushes ever newer bounds. But calculated risk taking, thoughtful experimentation. These are the things that will put companies on top of the heap.”

BTW: The Minnesota chapter of the Business Marketing Association (BMA-MN) celebrates its first anniversary this month. It’s gone from zero to 120 members in that time. Business-to-business marketing strikes me as a particularly dynamic field right now. More and more B2B companies are looking to get away from standard brochures and “brochureware” Web sites and create more dynamic interactions with customers. B2Bs have rightly focused on selling on features—but they’re realizing that a more “emotional” (there may be a better word) engagement can drive sales. You can watch some of the speakers from previous BMA-MN’s events here.

Birdwatching in the Twitterverse: @catalyststudios, @BMAMinnesota, @generebeck

“Operations as Marketing”

When I first talked with Rob White, for an article I was writing for DeltaSky magazine on the Twin Cities marketing-creative community (see page 122 on this link), he was hesitant to call the Uptown Minneapolis company he cofounded, Zeus Jones, an advertising agency.

Rob’s had a long career in the ad business, including the president’s job at Fallon. He helped develop many award-winning campaigns for notable brands. He’s an ad guy, right? So what should I call this beast, Rob? He threw out a number of possibilities, then just laughed.

If you can think of a term that mashes up marketing, graphic design, interactive, business strategy, and a soupcon of media strategy, let us both know. Whatever you call it, it’s innovative—though Rob and his partners would claim that the innovation is driven primarily by clients looking for new ways to reach people.

Rob, along with fellow former Fallon fellas Adrian Ho, Christian Erickson, and Eric Frost, opened Zeus Jones in March 2007. They had dug the creative energy at Fallon, but they were finding themselves wanting to try some new ideas that didn’t fit Fallon’s more traditional style.

“The marketing world is so cluttered, it’s so difficult to get people’s attention,” Adrian notes. Fast-evolving interactive technology was revealing tantalizing new creative possibilities. Marketers are certainly putting “trad-ad” messages online, and this isn’t to say they don’t work. But the interactive world can also swiftly undercut those messages via brand critics, marketing-BS detectors, and unhappy, often video-posting customers.

The result: “The picture of a company is being formed much less by advertising,” Adrian says. That image, he and his colleagues believe, is being shaped much more by how a company acts—how it helps people, not the clever ways it shouts at the consumer masses.

Rob, Adrian, and company see a distinction between “traditional brands,” which rely primarily on good ol’ mass-marketing techniques; and “modern brands, which realize that those techniques were less and less able (at least by themselves) to drive real growth and loyalty.

These moderns are generally newer firms like JetBlue, Zappos, Netflix, and (of course) Google. The way Zeus Jones sees it, these brands’ entire approach to business is different. Marketing isn’t just tactical to sales—it follows from what they can actually deliver. Zeus Jones calls it “operations as marketing.” (Some examples of that here.)

Says Rob: “We’ve reached an inflection point where marketing can help business.” Not as a fun-loving sidekick, but as a strategic collaborator. Sitting at the adults’ table.

So what does Zeus Jones do? To get an idea, take a gander at its work. In particular, check out its projects for Nordstrom, especially the “Recent Work” on the right on the page. It’s not a breaking RSS feed to note that the mainline department-store business hasn’t been great this past decade or so. But Nordstrom and Zeus Jones have been creating some visually compelling ways to refresh the business model and business strategy for an interactive age—with the focus squarely on service.

Whatever this is, it’s not traditional consumer marketing. (In fact, it’s past time to declare the term “consumer” disgustingly dead.) And whatever it is, Zeus Jones’s clients seem to like it. From a handful of people working at a single long table in a small Uptown office, Zeus Jones will soon be moving into larger quarters nearby.

It’s one of the top new-style marketing companies in town worth following.

BTW I: There is a Jones at Zeus Jones, but Sarah Jones’s hiring was, Rob White says, a complete coincidence. No Zeus there, though. Rob, a native of Scotland, half-claims the company’s name emerged from a group haze induced by single-malt whisky. Perhaps more believably, it’s a Google-friendly name with the etymology the partners thought appropriate to the firm: Zeus = powerful, creative; Jones = buttoned down businessman.)

BTW II: Speaking of Uptown marketing companies: Dig the new HQ for another local up-and-coming shop, Mono.

I’m posting fresh BTW every Thursday; tweeting most business days at @generebeck.