With her calm countenance and dry wit, Mich Mathews, senior vice president of Microsoft’s Corporate Marketing Group, provides a sharp contrast to hyper-animated CEO Steve Ballmer. But it is Mathews whom Ballmer has chosen to execute the company’s marketing transformation, centered on its customer value proposition initiatives. Mathews, who joined Microsoft in 1993 as head of corporate public relations, spoke with CMO magazine Editor in Chief Rob O’Regan about Microsoft’s marketing reinvention from her office on the company’s Redmond, Wash., campus.
CMO: How did Microsoft’s marketing transformation begin? Did you wake up one day saying, “I’m going to transform the marketing organization?”
Mathews: Steve [Ballmer] woke up one day [and said that]. If you ask him what he is, he says he is a marketer, not a technologist or an engineer.
That’s a blessing and a curse for you, right?
Yes. He puts lots of energy into it, but I have to keep reminding him that the marketing world has changed a bit since he was selling cake mix. [Ballmer began his career in the 1970s as an assistant product manager with Procter & Gamble.]
What needed to be fixed?
Marketing was largely a marcom function. Marketing was always out launching something or doing an event when it should have been back under the hood with the engineers figuring out the next version [of a product] that’s not going to be on the market for another two years.
I’m guessing that some people on the team thought marketing should continue to be in a marcom role.
No. That was the really interesting thing. Steve’s staff is dominated by the engineers, but they were saying, “I need the engineering ranks to have customer insight and it’s not going to come from the engineers alone. We need marketing to do something in partnership with engineering.” They talked about brand insight and really understanding customers.
How much of a gap was there between the existing competencies you had in the marketing organization and the ones you determined that you needed to be successful with this new model?
Quite large. We built a competency appraisal tool, and we’ve asked all our Redmond-based marketers to take it. We have not made it mandatory because we didn’t want this to be a jam. We want people to see the wisdom and some benefit of using it.
Are you seeing any clash of cultures with the marketers that you’ve developed here versus the expertise that you are bringing in from the outside?
Yes, we are seeing it. We hired someone from Kimberly-Clark who came in and asked to see our segmentation. The person showed her [a list of] the people who buy from us. She said, “This isn’t segmentation-segmentation is the whole market.” She was so depressed. I said, “Don’t be depressed. You’re going to make us be great about this. You can educate the people who don’t know.” I gave her a hug. We have to be patient and recognize that these things take time. This is going to be a very long evolution for the company.
Your background is primarily marcom. What new skills did you need to learn to oversee this effort?
Studying how packaged goods and other companies do it was a great education for me. The drug companies are most analogous to us in terms of creating [intellectual property] and the role marketing plays in creating IP. When you look at how the drug companies go to market, they are trying to influence the decision and they are trying to influence the consumer.
The other thing I personally have learned is patience.
I’m sure it helps mitigate the sense of urgency [to implement changes] knowing that Steve is behind this so strongly.
He has it as one of his performance goals with the board. Last year was about re-energizing marketing. This year it’s about perception changing.
Do you meet with the Board yourself?
No. Our board isn’t as hands-on with marketing stuff.
Some people argue that if marketing is going to become more strategic, then it has to show clear connections to the company’s growth. And company growth is, above anything else, what the board cares about, right?
Yes, but I guess they don’t see it on the agenda as “marketing.” They see it as, Let’s review our Linux plan, or our customer satisfaction plan or our Google plan. Let’s review what we’re doing on security. And so it doesn’t show up as marketing, but marketing turns up in those meetings.
Switching gears a bit: Because you have so many customer types that you target, how do you maintain a consistent brand message across those different groups? Do you even try to do that?
No, we don’t. We want to build very strong sub-brand identities for Office, Windows, Xbox, MSN and so on. The Microsoft master brand is a wonderful asset, and you can park a bus under it. But it’s very important to have that strong sub-brand identity. You want to go to market for MSN versus Google, or Xbox versus Sony. It would be very easy for us to have everything look the same, but given the breadth of audiences we need to talk to, if we went that route we would be making mush. Great marketing is about uniquely understanding the audience.
Are there certain common elements that you want every sub-brand to convey?
Yes. There is a brand tone for Microsoft that we expect everyone to follow, and they have to go through a rigorous testing process on any manifestation. The discussion we’re having now is, should there be another layer in our mix to unify some of these sub-brands? This frankly is a resource discussion on whether we should lower what we’re doing at the sub-brand level to free up some resources to do more at the segment layer or at the audience layer.
I would think some of the research you’re doing would give you better insights into how those sub-brands play into each other.
Absolutely. It’s pathetic when I think about what we were doing four or five years ago. Instead of throwing money out there and hoping it works, we now have so much that we do to inform the message to know if it resonates with our target audience. It’s night and day. Still, we have so much to do.
How is your marketing mix changing? Are you relying less on traditional advertising? Are you looking into more word-of-mouth marketing? Experiential marketing? Branded entertainment?
We don’t have awareness issues.
You have the opposite problem.
Which is a luxury. Experiential marketing and sponsorships and using advertising for awareness are not necessarily things we need, but they are in our mix.
The area that we are investing in like crazy is around relationship marketing: the systems, tools and processes that allow us to have an ongoing conversation with our customers. The area around this that excites me the most is Microsoft.com. We are the second most visited website on the planet. And those are people every day who are coming to say, “Hey, I’m interested in you.” It’s just the most amazing magnet.
We are just scratching the surface in using Microsoft.com as that relationship engine. Our dream is that eventually you can personalize the visit. You’ll [decide] how you want to have the conversation with Microsoft.
Is your marketing budget growing? Have you received additional resources to do some of these new things you are trying to do?
No, I’ve made trade-offs. I don’t think our problem is a resource issue. It’s a big number. It’s got to be spent wisely.
From CMO magazine (a publication of CXO Media, Inc.), June 2005