Customer Relationship Management

Marketing
mastery matters
By Marianne Seiler, Paul F. Nunes and Jeffrey D. Somers
A major Accenture study reveals that a significant
investment in marketing is crucial to achieving high
performance. But the skill levels that constitute mastery
continue to shift constantly, and today’s best practice
can become tomorrow’s price of entry. No company
can afford to be complacent.

It’s not just a cup of coffee you’re looking for when you walk into a Starbucks. What draws
customers of the Seattle-based company back to its cafes again and again is the consistent
delivery of a specific, specially branded experience.

And that experience matters: Companies that enjoy strong customer loyalty also have
higher margins and revenue growth—and thus higher shareholder value. In fact, according
to Accenture research, customer loyalty accounts for 38 percent of margin, 40 percent of
revenue growth and 38 percent of shareholder value.

Previous Accenture research
demonstrated that a company’s
ability to win customer loyalty is
the defining characteristic of high
performance in marketing—the
quality that distinguishes Starbucks
Corporation and a handful of other
companies we call capital-M mar-
keters (see “The best and the rest,”
Outlook, October 2004). That
research also identified five core
marketing capabilities characteristic
of high performers.
• Developing and delivering the
branded customer experience
• Creating and shaping demand
• Harnessing talent and technology
• Translating foresight and insight
into marketing productivity
• Driving marketing to meet perfor-
mance objectives
Subsequent research into the link
between marketing capabilities and
business performance has further
revealed that those five capabilities
account for at least 50 percent of a
typical company’s ability to win
customer loyalty, a number that can
reach 60 percent for B2B2C compa-
nies (see page 63).
To be sure, factors that have noth-
ing to do with marketing also play
an important role in sustaining
customer loyalty. Market maturity
and customer buying habits, as
well as regulation, product patents
and industry structure (monopo-
lies, for example), all contribute to
the nearly 50 percent of a typical
company’s ability to win and
sustain customer loyalty not
accounted for by our five core
capabilities. Yet the number and
range of these extraneous factors
make the impact of our five core
capabilities—and the 120 support-
Outlook 2006, Number 2 61
Customer Relationship Management
ing skills that underlie them—all
the more remarkable.
Some marketing capabilities are
clearly more important to business
performance than others, even
among our five core capabilities. Of
this group, the two most closely
associated with customer-facing
delivery—“developing and deliver-
ing the branded experience” and
“creating and shaping demand”—are
the most crucial (see “Mapping
marketing mastery,” page 65).
Integrated execution
However, the top performers in our
survey (and to some extent their clos-
est competitors) also scored especially
well on the three of these capabilities
that have less direct impact on cus-
tomers. So while mastering certain
marketing capabilities is critical to a
company’s success, high-performance
businesses clearly recognize the
importance of excellent, integrated
execution of all five capabilities.
Interestingly, the two customer-
facing capabilities are as important
to B2B companies as they are to
B2C companies, a result we find
particularly striking, since indus-
tries that use the B2B model have
traditionally been relative laggards
at marketing. (For a related article,
see page 68.) Equally interesting,
we found that mastery of these
two capabilities is by no means
exclusive to companies from fully
industrialized nations; indeed, some
of the highest scores came from
companies in emerging economies.
We found that these companies,
notably in Asia, are frequently just
as good as their Western counter-
parts at developing and delivering
the branded experience and creating
and shaping demand—and that they
are successfully leveraging these
capabilities to penetrate markets
62 www.accenture.com/Outlook
in industrialized nations. Taken
together, we see marketing capabili-
ties as an emerging weapon of
choice for all companies—across
industries, business models and
geographic boundaries.
No company, regardless of business
model or geography, can become a
capital-M marketer—that is, achieve
the kind of marketing mastery that
contributes to high performance—
without taking a business-wide
approach to marketing and without
integrating the marketing function
into everything the company does.
The high performers we have
observed have achieved excellence
across the full range of marketing
capabilities and skills.
However, we have also observed that
mastery of specific skills—or executing
these skills at a proficiency level even
above excellence—plays an important
role in setting some companies apart.
We discovered, for example, that
“executing a pervasive innovation
agenda” is the element or skill set
within the “creating and shaping
demand” capability that has the most
impact on business performance. It is
also the same skill set that so clearly
differentiates the Japanese carmaker
Toyota Motor Corporation.
Targeting Generation Y
Keen to target younger car buyers—
a notoriously fickle and demanding
demographic, as well as a stubbornly
anti-establishment one—Toyota
launched an entirely new brand, the
Scion, and targeted its marketing
to Generation Y. Scion has been a
huge success. Its unique-to-America
designs are especially popular, as are
a huge range of aftermarket acces-
sories, which enable buyers to tailor
cars to their personalities.
Several skills within the five core
capabilities seem to be especially
strong predictors of success or fail-
ure at winning customer loyalty
and thus achieving high perfor-
mance. High scores on both “man-
aging talent” and “focusing on
high-potential segments”—compo-
nents of “developing and delivering
the branded customer experience”—
greatly increase the likelihood of
top business performance. By con-
trast, low scores on these particular
skills, as well as a low score on
“using leading-edge research into
future needs”—a component of
“translating foresight and insight
into marketing productivity”—
diminish the likelihood of achieving
high performance.
As we probed deeper into the specific
contributions of the skills that are
components of the five capabilities, a
Marketing and customer loyalty
The level of customer loyalty a company is able to achieve is determined by a broad range of factors (see story).
However, Accenture research shows that as much as 60 percent of the differences in customer loyalty companies
achieve is attributable to the differences in their mastery of key marketing capabilities. The diagram below depicts
the relative portion of customer loyalty differences explained by differences in marketing capability mastery.
B2C companies
50%
50%
Customer loyalty
of company A
Source: Accenture analysis
clear message emerged: Execution is
everything. Among the skills required
for “developing and delivering the
branded customer experience,” those
needed for delivery are paramount.
The critical issue in delivery, more-
over, is consistency, which accounts
for almost half of the total impact
that the branded experience has on
winning customer loyalty.
Most critical factor
People are often the most critical
factor in execution. Even for the
three non-customer-facing capabili-
ties, the skills that matter most are
those that have to do with people.
For example “harnessing talent and
technology” is the capability that, if
improved, is most likely to help a
company outperform its competitors,
according to our respondents. And
B2B2C companies
40%
High performance
in marketing
Other factors, including:
• Non-marketing capabilities
60% • Customer inertia
• Market maturity
• Geography
• Industry structure
Customer loyalty Customer loyalty Customer loyalty
of company B of company A of company B
Outlook 2006, Number 2 63
Customer Relationship Management
managing, training and retaining
talent is the skill within the “har-
nessing talent and technology”
capability that has the most impact
on the branded experience.
Indeed, the marketing skills that
matter most across all the capabili-
ties are largely concerned with peo-
ple management—ensuring that all
functions deliver the same branded
experience, training all frontline
people completely and effectively,
and reinforcing the brand promise
across campaigns.
Starbucks, for example, has an inten-
sive training program that educates
employees about the company’s strict
product specifications—such as the
precise instructions for preparing an
espresso—which are key components
About the research
Accenture generated the hypothesis
about the five core capabilities and
120 supporting skills (see story) that
underpin high performance in market-
ing by interviewing 70 marketing
experts and executives.
These skills helped focus our quantita-
tive research, which consisted of a
comprehensive survey of more than 700
key marketing decision makers across
17 industries in North America, Europe
and Asia, representing B2B, B2C and
B2B2C industries.
Participants rated their company’s
mastery of the 120 skills needed for
mastery of the five core capabilities,
as well as their performance, against
four measures:
• Customer satisfaction, retention
and loyalty
• Profitability, margins or returns
• Revenue growth
• Shareholder return
64 www.accenture.com/Outlook
of its brand promise. Starbucks is
also one of the few companies in
any industry to extend its attractive
pay and benefits package to part-
time workers, thus attracting the
best people from what is normally
a transient workforce.
Our research shows that training and
retaining the best talent accounts for
most of the “harnessing talent and
technology” capability’s impact on
customer loyalty. And a company that
scores very high on managing talent
has a significantly increased likelihood
of being a top business performer.
Among the key skills that underpin
this capability are “applying rigor-
ous recruiting criteria” and “encour-
aging risk taking among staff.” Pret
A Manger (Europe), a gourmet sand-
wich shop that has revolutionized
We wanted to be sure we were com-
paring like with like, so we probed our
respondents carefully about the precise
nature of the capabilities they claimed
to have mastered.
The data we collected enabled us to
use sophisticated statistical analyses
to determine the links between com-
petency in the five capabilities and
their component skills, and the ability
to build customer loyalty and achieve
superior business performance.
Segmentation analysis deepened our
understanding of what distinguishes the
high-performance marketing businesses
overall. Our survey participants fell into
nine business performance segments,
and these, in turn, fell naturally into
four groups. The stellar performers
in segments one and two—less than
25 percent of the survey sample—
significantly exceeded both average
performance and the performance of
the next-best segment.
Mapping marketing mastery
The 50 percent difference in companies’ customer loyalty that is determined by mastery of
marketing capabilities can be broken down by individual capabilities and skills.

Performance contribution by marketing mastery capability and skill

10
11
33%
1. Develop and deliver the branded experience
16 2. Create and shape demand
3. Harness talent and technology
4. Translate foresight and insight into marketing productivity
30
5. Drive marketing to meet performance objectives

1. Develop and deliver the branded experience

Deliver brand; promise consistency 47%

Manage brand for value 31

Focus on high-potential segments 12

Take broad view of brand 10

2. Create and shape demand

Execute pervasive innovation agenda 37

Expand into new markets 28

Use leading-edge research into future needs 12

Use channels strategically 11

Create high-margin products/services 7

Leverage global marketing best practices 5

3. Harness talent and technology

Maintain, train and retain best talent 44

Employ leading marketing processes and technology 35

Source world-class marketing talent 21

4. Translate foresight and insight into marketing productivity

Extract and apply value-adding insights 66

Use customer data strategically 34

5. Drive marketing to meet performance objectives

Ensure senior executives have and use marketing savvy 41

Track performance versus objectives 34

Use organization structure to enhance performance 25

Source: Accenture analysis

Outlook 2006, Number 2 65

Customer Relationship Management
mealtimes for UK office workers,
not only invests significantly in
recruiting, training and compensat-
ing talent; the company also
empowers its employees to take
action to maintain positive impres-
sions of the Pret experience—by
offering a free cup of coffee to a
customer who has had to wait too
long for an order, for instance.
So can any company become a
high-performance marketer? Some
industries are plainly much better
suited to marketing than others.
Not surprisingly, those closest to
the consumer, like retail and con-
sumer products, display superior
marketing mastery (see chart,
below). Take Samsung, a large
electronics company in Korea,
which has excelled at “translating
Industry leaders and laggards
Accenture calculated average scores for each company in our survey (see story) based on
its reported level of mastery of the 120 marketing skills that underlie the five core marketing
capabilities. We then calculated average scores across several industries. As the diagram below
shows, the average level of marketing mastery ranges widely from industry to industry.
Average marketing mastery by industry
Resources and Energy, gas Services Transportation Health care and Computers and
chemicals and oil pharmaceuticals peripherals
Low
Media and Industrial products Communications, Financial services
entertainment and equipment electronics and high tech and insurance
Source: Accenture analysis
66 www.accenture.com/Outlook
foresight and insight into market-
ing productivity.”
Confronted with the challenge of
allocating marketing resources across
more than 400 category and country
combinations, Samsung launched an
18-month project to gather detailed
and integrated information about all
these combinations, right down to
country-level brand data. It then
made sure that these data were easily
accessible to all company marketers
and used sophisticated analytical soft-
ware to predict the impact of different
resource allocations. The upshot: one
of the most successful attempts to
extract meaningful insights from
customer data ever undertaken.
Some companies currently enjoy a
solid lead as masters of marketing,
Retail
High
Automotive Consumer
products
but nearly all our respondents see
clear challenges to achieving their
ideal state of mastery. Surprisingly, it
is not organizational barriers that
daunt them, or an excessive focus on
costs or technology. Nor is it a lack
of leadership, accountability, vision
or innovation (though underperform-
ing companies are more likely to cite
these reasons for failing). The two
obstacles most frequently cited are
a lack of funding or investment, and
a lack of resources and talent.
Investing in performance
That executives feel this way is unfor-
tunate, because our research has
found that investment is critical to the
successful creation of marketing mas-
tery and its impact on business per-
formance. According to our research,
the companies that invested the most
in marketing capability, as a percent-
age of their overall investment in the
business, achieved the greatest level of
mastery and the best performance.
How companies divide up the total
investment among the five core mar-
keting capabilities is not really impor-
tant, however. Rather, it is the level of
mastery achieved in each of the capa-
bilities and skills that we were able to
link to a company’s success, regard-
less of the portion of spending allo-
cated to it. So when companies invest
in marketing, they must ensure their
investment translates into real capa-
bility improvement.
So can the best maintain their lead?
Or will the rest catch up?
Maintaining a leadership position
through sustained marketing mastery
is by no means a sure thing. The
skill levels that constitute mastery
continue to shift constantly, and
today’s best practice becomes tomor-
row’s price of entry. No company
can afford to be complacent, because
marketing mastery does matter,
which means the time to invest in
marketing mastery is now.
About the authors
Marianne Seiler is a senior executive in
the Accenture Marketing Sciences prac-
tice. Dr. Seiler’s 15 years’ experience has
included developing customer strategies,
launching new products, expanding geo-
graphic and customer markets, valuing
and retaining customers, developing and
implementing marketing/sales/service
segmentation strategies, creating and
enhancing marketing databases, and
restructuring marketing/sales organiza-
tions; she has also worked for a number
of Fortune 500 companies. In addition,
she has spoken and published on
numerous marketing topics, including
customer retention, telemarketing, data-
base marketing and customer segmen-
tation. Dr. Seiler is based in Chicago.
marianne.seiler@accenture.com
Outlook Senior Contributing Editor Paul
F. Nunes is an executive research fellow
at the Accenture Institute for High
Performance Business in Wellesley,
Massachusetts, where he directs studies
of business and marketing strategy. His
work has appeared regularly in Harvard
Business Review and other publications.
His most recent book is Mass Affluence:
Seven New Rules of Marketing to
Today's Consumers (Harvard Business
School Press, 2004).
paul.f.nunes@accenture.com
Jeffrey D. Somers is a Chicago-based
manager in the Accenture Marketing
& Customer Strategy practice. He has
13 years of experience in strategic mar-
keting and business strategy consulting.
Before joining Accenture, Mr. Somers
was a senior manager in the Brand &
Corporate Strategy Group of the Blue
Cross and Blue Shield Association.
jeffrey.d.somers@accenture.com
Outlook 2006, Number 2 67