New CEO To Transform Yahoo! With IMC Strategy

This week Carol Bartz, the new CEO of Yahoo!, announced major changes at the ailing company. While most reports of the restructuring noted Bartz’s shift to a more “top-down” managerial approach and paring down excessive layers of management, we here at Medill IMC think some aspects of the restructuring signal a promising shift toward a more customer-focused organization.

They certainly need it. Aside from narrowly escaping a takeover bid from Microsoft last year, Yahoo! has been losing market share in search to Google for years. Its diverse products– from Flickr to Delicious to Yahoo! Finance - lack consistency. And what’s with the name, anyway? Something about yodeling?

It helps that they’re creating a CMO position, which they’ve apparently never had. But the changes go deeper. In Bartz’s words from the Yahoo! blog:

“We’ll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer.”

Clearly, integration is a core goal at the new Yahoo!, along with a renewed focus on the customer with the creation of a new Customer Advocacy group:

“After getting a lot of angry calls at my office from frustrated customers, I realized we could do a better job of listening to and supporting you. Our Customer Care team does an incredible job with the amazing number of people who come to them, but they need better resources. So we’re investing in that. After all, you deserve the very best.

We’re also leaning on this team to make sure we’re all hearing the voice of our customers (consumers and advertisers). I’m singularly focused on providing you with awesome products. Period. The kind that get you so excited, you have to tell someone about them. Whether on your desktop, your mobile device, or even your TV.

And that takes a real understanding of what you want/need/love/hate, how you’re using our products, and what you find simple, intuitive, easy and fun. Who wants innovation for innovation’s sake if it doesn’t make your life easier, more efficient, more productive? So expect us to hear you better and take better care of you.”

Time will tell if Yahoo! can channel these noble intentions of integration into actually being able to serve its customers' needs. But they've taken the first step in realizing that not being customer focused is, for them, no longer an option. For us who live and breathe IMC every day, this will be a company to watch.

Or, as Bartz says, “Look for this company’s brand to kick ass again.”

-- Colleen Maley

AmEx's Data Mining Techniques Spook Its Customers

One distinguishing feature of IMC is its strong emphasis on data analytics. Now more than ever, quantitative insight and analytical skills are essential tools for gleaning meaningful consumer insights from the overwhelming surfeit of consumer data that most large corporations possess.

As both a marketer and a consumer, I find these treasure troves of data both exciting and somewhat terrifying. Last week at Davos, Richard Edelman bemoaned the general erosion of trust in corporate entities, and to be sure, this is a critical issue for IMC as well. Analytical skills are important, but being able to build relationships with consumers based on mutual trust is what ultimately builds shareholder value over the long term.

In this volatile economic climate, then, consider this New York Times article from January 30 that revealed American Express’ targeted rate increases for cardholders who used their Amex cards at specific establishments:

The question, then, is how much of the data they can use before spooking their customers. Kevin D. Johnson, a 29-year-old Atlanta resident who runs a marketing and communications firm, received a letter from American Express last October saying that his credit limit was being lowered. One reason was that other customers who had used their cards at places where he had shopped were late in paying their bills.

Read the full article at the New York Times.

UPDATE: After Good Morning America picked up this story, American Express clearly felt the sting of the bad P.R. of this data mining technique, and announced that it would stop the practice.

Does this practice take regression too far? Is there a line between “choosing your best customers” and outright discrimination? Would this policy incite you to choose a different credit card company?

We'll keep an eye out for future stories about issues in marketing ethics. And send us your suggestions!

-- Colleen Maley