CMOs running national brand campaigns are on a roll, but many of them are unhappy about the local, channel, and field sales operations of their companies and partners. According to a new CMO Council report, many national CMOs are looking for ways to beef up the effectiveness of their local counterparts.
“They think localization isn’t being tackled in the most effective manner,” said Liz Miller, the CMO Council’s vice president of marketing programs, in an interview with CMO.com. “The national-brand CMOs want to provide tools for their local representatives that have the same look and feel.”
In the new CMO Council report, entitled “Brand Automation For Local Activation,” just 8 percent of the 296 brand marketers surveyed indicated they were extremely satisfied with the new product, pricing, and promotional campaigns that are being executed on the local level. That low percentage is causing soul-searching among national-brand CMOs.
As evidence of the problem, the CMO Council pointed to a U.S. State Department report that found localization problems are causing American businesses to lose $50 billion annually.
What’s the best way to fix the localization problem?
“We are in a big race to automate,” said Miller, noting that new digital media approaches hold promise to fix the problem. “But we need to know the end goals. We know that national brands want to be more relevant in local markets.” Most of the brand marketers interviewed for the report agreed that comprehensive brand campaign automation will strengthen work between headquarter offices and their local outlets.
But what exact form should the new digital features take? The report cited some features, including one reported by Google noting that digital ads carrying a local phone number will draw more responses than ads with national phone numbers. Also, mobile searchers are much more likely to respond quickly to local searched ads than PC searchers.
Miller said that in spite of the hullabaloo and excitement over mobile marketing, most CMOs still haven’t fully committed to mobile, even though localization could be improved by localized mobile-engagement activities. In an indication that marketers still need to be convinced of the value of mobile localization features, the CMO Council study found that just 9 percent of marketers believe mobile will aid local connections, while just 12 percent view mobile ads as a successful advertising channel. A whopping 33 percent are still studying the issue. “We’re in danger of losing sight of the value of mobile,” Miller said.
According to the report, marketers seem to understand they have a localization problem and are beginning to develop ways to fix it: The study found that just 7 percent of the respondents think they offer effective campaigns and measures that activate local consumers.
The CMO Council report told the story of the trials, tribulations, successes, and failures of “SoLoMo”–social, local, mobile–in specific case histories. For instance, what could be more challenging than the dynamic between national brands and locals than insurance companies in which national companies are wholly reliant on local providers?
A case in point is Farmers Insurance, which has 15,000 exclusive insurance agents–all of them independent contractors–across the country. Debra Lechner, Farmers assistant vice president of marketing, said national brand specialists have been challenged to obtain the cooperation of individual agencies for some initiatives while working to show the agencies the valuable ROI. In the process, some best practices have arisen.
For local advertising, the Farmers Group offers a subscription-based turnkey marketing strategy package for agents.
“Every agent in the local market is offered this package at the same time so that we can run the media in a cooperative way,” Lechner said. “Agents have a combination of direct mail, an online Web site branded with the Farmers brand and their own location, as well as radio, television, and online advertising through vendors and sponsorships.”
Farmers also uses social media, giving agents a chance to purchase Facebook pages managed by an outside company while the agents are still free to use their own Facebook pages. The outside company ensures compliance with corporate and industry standards. When a major Farmers initiative is rolled out, social media is pressed into action, and agents get content for their pages.
Another company that has developed a sophisticated localization program is Sears Hometown & Outlet Stores, which has more than 1,200 stores across different formats, including home appliance showrooms, outlets, and a combination appliance and hardware stores. Sears has a comprehensive local marketing strategy centered around print that is often focused on newspaper circulars.
“We incorporate local demographic data and sales history at the ZIP code level to determine where we are going to market,” said David Buckley, Sears Hometown Stores’ CMO. “We have developed several portals for materials that are semi-customizable, allowing local owners to order printed materials around different promotions that we are running, and they can add local information.”
In addition, Sears has a pioneering mobile app, one that includes capabilities for making purchases, reading reviews, scanning barcodes, and scheduling in-store pickup. “We are pretty far ahead in that [mobile] area,” Buckley said.
The CMO Council study was conducted in partnership with Balihoo, which seeks to assist national brands in controlling the customer experience close to the point of purchase.
“The challenges facing local marketing are easy to misdiagnose, leading many organizations to load up on point solutions or bring on new engagement channels like mobile or social without having the right platform infrastructure,” said Balihoo CEO Pete Gombert, adding that national brands must develop clear strategies for localization, including the ability to measure results.