CMO conference 2010 - Justin Basini

1

Leadership in Marketing: from shareholder to stakeholder value

Justin Basiniwww.basini.com www.conservation-economy.orgFounder, Basini & Company

Founder & CEO, Allow (www.i-allow.com)

No group hugs

You decide what to take back to your desks or throw away

?HOW ARE YOU FEELING SO FAR?

REALITY, CONSUMPTION & SUSTAINABILITY

BUBBLES, OVER-CONSUMPTION &

TRUSTMARKETING,

HUMANITY & BUSINESS


TRUST, BUSINESS& BRANDS

MARKETING, HUMANITY & BUSINESS

We are at a fork in the road

Where have we come from?

Where are we going?

1840 2008200019501900

We are certainly getting richerWe are certainly getting olderWe are working more

We are getting fatter

More crimeWe are voting less

1840 2008200019501900

We are not however getting more satisfied

CONSUMPTION ENGINEERING

Build trust

(WE) MARKETERS ARE THE ENGINEERS OF CONSUMPTION

?CAN WE CONTINUE TO BE CONSUMPTION ENGINEERS?



TRUSTMARKETING,

HUMANITY & BUSINESS

THE BRAND ASSET BUBBLE

OVER-CONSUMPTION & THE EFFECTS

WE AREN’T TRUSTED ANYMORE TO DO THE RIGHT

THING

Brand asset value is outstripping perceived customer value

Intangible assets are making up a larger proportion of enterprise value

0

10

20

30

40

50

60

1950s 1960s 1970s 1980s 1990s 2000s

% e

ntr

epri

se v

alu

e

Source: BAV databases and Y&R historical research (Market Leader Sept 2009)

For strong brands, brand value as total of company value is greater still…

84%

Source: Brand Finance, Market Leader Sept 2009

The ‘valuation gap’ according to consumers

Source: BAV 1993-2007 brand data. Copernicus, Jack Trout and Kevin Clancy (Market Leader Sept 2009)

PerceptionIf brand value is increasing….

So should brand trust

Brands should be more liked and admired

Brands should be better known

Quality perceptions should be increasing

Brands should be more differentiatedDifferentiation declined in 40/46 categories

Quality perceptions decreasing

24%

Less salient than ever

20%

Less liked and respected

12%

Less trusted than ever

50%

Reality (over last 10 years)

Less than

40% of people know their

neighbours

Average age of “midlife” crisis now down to

30s

Incidence of depression and

breakdown has TRIPLED in past 20 years

Number of people taking part in community activity

half what it was 20 years ago

Fewer than 1 in 3 say they believe in

God

We’re consuming resources as though there are 3 planets, not

1Sustainability isn’t compatible with consumerism in it’s current form

Source: WWF, One Planet Living 2009

CAN I

YOU?

Doct

or

Teac

her

Prof

esso

rs

Judg

es

Cler

gy/P

riest

s

Scie

ntist

s

Tele

visio

n Ne

wsr

eade

rs

Polic

e

Ord

inar

y m

an/w

oman

Polls

ters

Civi

l ser

vant

s

Trad

e Un

ion

lead

ers

Busin

ess l

eade

rs

Gove

rnm

ent

Jour

nalis

ts

Politi

cians

92%88%

80% 80%

71% 70%

63%60%

54%

45% 44%

38%

25%

16%

22%

13%10%

5%

14%18%

-11%

4%

-13%

-5%

-16%-13%

19% 19%

-22%

45%

120%

-7%

Who do we trust and how is it changing?

2009 % change 1993 to 2009

Source: IPSOS MORI, around 2,000 British adults 15+ asked the question: “…would you tell me whether you generally trust them to tell the truth or not?”

Arge

ntina

Aust

ralia

Chin

a

Fran

ce

Indi

a

Japa

n

Kore

a (S

)

Russ

ia

Sout

h Af

rica

Spai

n

Swed

en UK US

GLO

BAL

AVER

AGE

-43%

-17%

-9%

-8%

16%

6%

-28%

-37%

-58%

-1%

17%

-32%

-12%

-16%

Change in generalised trust over past three decades

Source: Justin Basini analysis of World Values Survey data 1980-2001. Notes: Each wave of global research is completed in those countries from 1000s of interviews with a range of representative demographic segments

TRUST IN BUSINESS DOWN TO 22% GLOBALLY, A

DECREASE OF 25% OVER THE PAST DECADE

?BUT ARE THESE ISSUES FOR US TO CLEAR UP? WHAT DO WE DO?



TRUSTMARKETING,

HUMANITY & BUSINESS

Rebuild trust

Source: Trust and Distrust in Society, Markova, Linell, Gillespie (2008)

Macro-social trust

Micro-social trust

Primary (taken for granted) trust

Reflective Trust

Basic trust (ontological)

Context-dependent(context specific) trust

A priori generalised trust

Inner dialogicality

Self-confidence / self-doubt

Third parties

Conceptual trust

Co-operation

Conceptual trustAuditing

Machiavellian strategies

Conceptual trustPre-conceptual trust

Psychosocial feeling

Pre-conceptual trust

Social cohesion

In group solidarity

Local communities

Emotional interdependencePsychosocial feeling

Pre-conceptual trust

Rebuild trust

A trusts B to do XEngage & establish credibility

Set the right expectations

Active honesty & respect

Keep your commitments visibly & be consistent

We all know what creates trust…now go do it!

Show you trust

Idea Why? Who’s doing it?

Build brands with massive premium

Takes more value out of revenue pool per transaction and generally increases length of ownership and resale value

Design products which last longer

Increases product life cycle, can be afforded by brand premium, helps resale/reuse

Create marketing which builds trust

Trust is social capital in a society, marketing can damage or build that trust e.g. using fear or over-promising

Be responsible for insight into all stakeholders not just customers

All stakeholder groups are human – marketing has the competencies to understand all wants and needs

Change systems to surface tensions between different stakeholder groups and train people

The ethical responsibility of managers is to balance the needs of different groups – doing this in practise is hard needs to be in systems and training

Integration of sustainability & CSR with marketing

Todays radical transparency means that companies need to integrate all activities holistically, plus marketing budgets are bigger and therefore can have more impact

Idea Why? Who’s doing it?

36

Leadership in Marketing: from shareholder to stakeholder value

Justin Basiniwww.basini.com www.conservation-economy.orgFounder, Basini & Company

Founder & CEO, Allow (www.i-allow.com)

Business

CMO conference 2010 - Justin Basini