What is right-housing and why is it essential for brands?
Right-housing has been high on the agenda at AAR for many years. Growing turbulence and disruption, however, have made the topic more urgent than ever.
It has never been more imperative for marketers to make every pound punch as hard as possible. Resources need to be put to work in different, smarter ways – especially given the squeeze on budgets from downward pricing pressure, low margins and slow growth.
The challenges are seemingly endless. So too are the opportunities. But whichever way you look at it, marketing has a lot on its plate.
We know there are no silver bullets, but – informed by numerous discussions with brands and their partners – we have a strong point-of-view on what the marketing community needs to do to tackle this complex issue.
“Brands are now in a perpetual cycle of change. To deal with the challenges of constant change, brands are regularly looking to redefine their operating models and capabilities in order to be future-fit and more relevant for their customers. To drive growth, they’re seeking ways to increase their bench strength”. Belinda Rowe, Non-Executive Director of HT&E
The context for marketing has shifted. Political, economic, social, technological and environmental changes are re-shaping people’s attitudes and behaviours.
Authority in all its forms is being called into question, with the establishment and other elites firmly in the spotlight. Brands are not immune from this scrutiny, and trust is harder than ever to earn.
Growing competition, new technologies, low margins, and disruption in distribution, retail and communication channels are creating a challenging environment – and one in which brands are under constant pressure to innovate.
This is why so many are reviewing their marketing ecosystems. There is an urgent requirement to find the right blend of internal and external capabilities to meet today’s challenges, whilst designing in the flexibility to adapt to new needs as they emerge. We call this process right-housing.
Despite undeniable difficulties, there’s never been a more exciting time to work in marketing. There are new opportunities to meet customer needs in ways that haven’t been possible before, and to unlock the full Creative Capital of your company.
The push and pull factors in right-housing
“We’re constantly searching for better models in terms of talent, capability and process. How can we achieve better outcomes at the greatest possible speed and the lowest possible cost?” Charlotte Kensett, Nationwide
The complexity and challenges of marketing in the 2020s are being felt by everyone, and brands are acutely aware of the need to use their resources more effectively, and apply their Creative Capital in new and innovative ways.
In order to ensure brands can connect with their customers and drive growth – both now and in the future – any solution must recognise both Pull and Push Factors.
Pull Factors are the things that will help future-proof the organisation, whereas Push Factors are current pressures that demand a response. For right-housing to have the best outcome, marketing ecosystems need to be designed, built and driven forward with both factors in mind.
The need for a strong brand: For a brand to leverage itself fully across every part of the customer experience and touchpoint, it is vital to engage in continuous smart innovation. To do this, you need to determine what the brand offers, how it behaves, and how it interacts with current customers and future prospects alike.
This is about much more than comms. It’s about harnessing Creative Capital around the consumer in order to deliver exceptional experiences. In part, this is about being useful and simplifying people’s lives, but it’s also about being distinctive and memorable.
Data, and the ability to turn it into actionable insight: Customer expectations are rising by the day. People are ready to offer up their data in return for more relevant and timely solutions; but only if the value exchange is clear, and they’re confident their details will be treated responsibly. As first party data becomes increasingly important, the brands that succeed in doing both will secure an important competitive advantage.
Speed and agility: To win out in the marketplace, brands need to respond to market evolution, technological developments and consumers’ changing needs more quickly and accurately than the competition. In an era of constant business reinvention, brands need to be able to react at the speed of Prime.
These are ‘whole enterprise’ challenges. They have significant implications for organisational design and operating culture, and can only be met by breaking down traditional silos. In a world where marketing, technology and logistics all need to work in lock-step, the modern CMO needs to be best friends with the CTO, the CFO and the rest of the management board.
Cost and time-efficiency: Low growth rates are ratcheting up the pressure on marketing budgets. Every pound and every hour of resources must be made to work as hard as possible. By minimising inefficiencies, you can re-deploy both to more productive ends.
This means structures must be simplified and duplication eradicated, preventing them from causing confusion, slowing things down and wasting money. Gemma Kidd from The Co-op was adamant on this point:
“It’s all about getting the right people focused on the right tasks. You have to establish crystal clear demarcation lines in terms of remits and roles.”
For Charlotte Kensett at Nationwide, this boils down to three things:
“First, you need a common purpose that everyone buys into. Second, you have to make sure everyone has a really clear understanding of the brand and what it stands for. And then you need to work hard at building and managing relationships. Without those fundamentals, you’ll never achieve true integration.”
Control and transparency: The marketing landscape is increasingly complex, which makes it imperative to have clear lines of sight and the ability to pull the necessary levers quickly. Topicality drives relevance; blink and the opportunity’s gone. As Robert Bennemeer at The Heineken Company said:
“You simply have to be able to get out the right content at the right time, especially around properties like the UEFA Champions League. That’s a key driver for us.”
Provable business value: ROI has never been more important. In both the short and long term, marketing needs to demonstrate its impact on the metrics that matter: sales and profit (or in other words, growth).
To a very large extent, these Pull and Push Factors are inter-connected. To take just one example, Robert Bennemeer at The Heineken Company pointed out how cost and value go hand in hand:
“If you’re not optimising your media, you’re wasting money, sacrificing impact and missing the chance to build a relationship with customers.”
What does right-housing involve?
“It’s not just that no one size fits all. It’s that no one size will fit the business forever.”
Gemma Kidd, The Co-op
From all our discussions, we know that every brand looking to right-house starts from a different place. For some, minimising current inefficiencies is the primary impetus. For others, the focus is squarely on future-proofing the business and creating competitive advantage.
Regardless, the key questions remain the same:
- What blend of internal and external capabilities will best drive growth for my business, now and over time?
- How will that blend vary across the different layers of my marketing ecosystem; from strategic thinking to creative origination, production, distribution and measurement?
- Should I tackle them all simultaneously or focus my efforts on one or two initially?
The answers will be different for every organisation, and each will need to make their own map to navigate the inherent complexities of creating a right-housing solution. But getting a strong outside-in perspective at the start can help you set off in the right direction.
Right-housing is a complicated process because, in a context where things are moving faster by the day, any solution must evolve as the business and its needs change.
This is why we always stress the importance of engineering a marketing ecosystem that is highly adaptive. But adaptation needs to be well-directed and purposeful rather than chaotic. You need to build from a solid base, and we’ve identified the five key ingredients that will increase your chances of success.
1. Focus on your unique DNA
No two businesses are the same. Before looking to tomorrow, you have to figure out where you are today. What are your true strengths and weaknesses? What are the “must do’s” to compete and win in your category? Above all, what needs to be unlocked or re-invented in order to drive growth? You also need to make an honest assessment of your company culture. What is the appetite for change and risk? How do your teams instinctively work? How does that fit with the rhythm of the business?
2. Understand the wider context
Right-housing is a means, not an end. You need to take into account the company’s overarching vision: what is your North Star, and how will right-housing help deliver your targeted growth? You also need to factor in all the other transformation projects happening within the company, and ensure your efforts complement those initiatives. Getting a strong outside-in perspective can help. It’s just smart to see what you can learn from the models other companies have designed and how they’ve been implemented.
3. Start from the right place
It’s essential to get everyone pointing in the same direction, but it takes strong leadership. Establish clear objectives and set expectations across the whole organisation. Be precise in breaking down the Jobs To Be Done across every layer of your marketing ecosystem. Ask hard questions of your external partners, but also look at them with fresh eyes: do you understand their full range of capabilities, and could you be getting more out of them?
4. Be restless and relentless
Right-housing involves significant change, and you need to be assiduous in monitoring both the model and the relationships within it. Issues will arise, but they’re much easier to fix if you spot them early. At the same time, you must be prepared to iterate endlessly. Right-housing has no end-point: the goal is continuous improvement. That means you need the right measures and methodologies to track progress, and a willingness to accept that today’s solution will not be perfectly suited to tomorrow’s demands.
5. Prioritise people
Ultimately, it’s people and the chemistry between them that builds a brand’s Creative Capital and drives growth. Without people who can bring the right expertise at exactly the right moment, the best model in the world is worthless. Do whatever it takes to keep them firing on all cylinders; it’s your responsibility to keep everyone inspired and energised. This can be especially important with in-house teams, who often receive a narrower range of stimuli.
Right-housing is about having the right resources in the right places to drive growth for the business. We have deep experience in helping organisations Design, Build and Drive adaptive marketing ecosystems, and well-informed views on how brands can face down the challenges of the 2020s. Most importantly, we know how to turn these views into action.
If you’re a senior marketer questioning whether you have the right ecosystem, or an external partner looking to adapt to the new environment, get in touch with us today.