While the Marketing Guys were in the Toilet...

'... the finance guys have taken over' according to Christian Majgaard, former Senior Director of Lego, in the final keynote address at this week's ESOMAR Congress. Majgaard called for a change to CEOs' salary structure in order to bring marketing research 'back into the boardroom'.

Majgaard, who was recognised by Fons Trompenaars in his book '21 leaders for the 21st Century', spoke of the failings of modern companies to develop, and respond to, a true understanding of consumers. He believes they increasingly fail to use the findings of customer research to transform their offerings. In his speech, 'New Trends: Modern Marketing - Lost Consumers', he outlined his view that marketing has become about 'telling stories about products the company makes anyway'.

Many companies, says Majgaard, are now headed by CEOs with a background in finance and a lack of marketing understanding. Companies are no longer asking 'who is the customer?', 'what does the customer want?' and 'what value do we offer customers?'. According to Majgaard, 'somebody changed the questions while the marketing guy was in the toilet'. Instead, businesses are now asking 'who are we?' and 'what do we want?' and 'what value do we offer shareholders?'.

With an eye on future earnings figures, he says, managers are reluctant to spend money on customer research or innovation. This is compounded by the increase in mergers and acquisitions - companies are either looking to sell 'so don't want to rock the boat', or to buy, 'so they aren't concerned with beating the competition as they're looking to buy them'.

As a result, marketers have small budgets and - instead of being able to use customer research to propose real changes - they have to be content with changing strap lines or logos, or 'introducing a new strawberry flavour'.

He gives the example of Scandinavian Airlines, which, having defined its brand as being about 'relaxed elegance', went about painting jokes on the side of planes, and repainting their tails. 'Was this the best the marketing department could do?,' Majgaard asks. He contrasts the example with that of Ryanair, which tried to address what customers wanted in terms of low fares and convenience. As a result, Ryanair's brand equity rose far faster than Scandinavian Airlines.

In another example, he describes how he put the new strap line of the First Hotels group ('your second home is first') to the test. Phoning the receptionists of several hotels in the group, he expressed interest in the new tag, and asked what had changed in terms of the service. All the receptionists simply said 'oh, it's just a strapline'.

Majgaard outlines several ways to 'get marketing back in the boardroom':

• Immerse the CEO and board in customers - for example, taking them to view focus groups.
• Be on their growth agenda - ensure that research reports talk about the ways customer insights can help the company grow.
• Become involved early with real innovation - rather than being brought in after products and services have been developed.
• Change CEOs' salary structure so that the customer value index is as important as the shareholder index - this will bring in a need for annual measurement.

As Senior Director at Lego, Majgaard was responsible for succesfully realigning Lego to what was happening in the market place. Demonstrating his belief in the power of listening to what customers really want, he finished his speech by saying: 'There's no such thing as a mature market - only tired marketers'.

Lots of bricks but no mortar on Lego's web site at www.lego.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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