To do that, it’s hitched itself to a millennial target and four fitness brands defining modern exercise, chief among them CrossFit. Reebok is enjoying the exclusive licensing rights to CrossFit’s trademark and title sponsorship of its summer games, but can the fitness program make Reebok relevant again?

“The real test is still in front of us—making the Reebok brand more relevant to consumers.”  

Those are the words adidas Group CEO and chairman Herbert Hainer said to shareholders in a 2007 annual report. At the time, Reebok had been a subsidiary of , the global sporting goods parent company of adidas and TaylorMade, for just more than a year. Reebok, once the leader in the athletic footwear market, ahead of Nike, had fallen out of relevance more than a decade earlier. When it was acquired by adidas Group for $3.8 billion in January of 2006, Hainer warned critics of the long road to the brand’s recovery.

Each March for the next four years, the group CEO assured investors that Reebok was finally on the right path. In 2009, the “clear roadmap” to success set out Reebok’s plans to dominate women’s fitness, challenge men’s sports, and revive heritage styles. By 2010, the success of the “toning category”—featuring footwear that promised to tone wearer’s legs—seemed to have revealed a better way forward. But by 2011 toning was waning and Hainer grasped at Reebok’s running and fashion shoes for a bright spot.

While the brand continued to search for an identity and a foothold in the market, the seed of a partnership with great promise had been planted. If and when it would bear fruit was yet to be seen.

The CrossFit Courtship

Among the crowd of enthusiasts that flocked to Carson, California, in July of 2010 for three days of fitness competition was the director of sports marketing for Reebok. A CrossFitter himself, Chad Whittman was there as a spectator but was also on a mission: to make contact with Greg Glassman and introduce the founder of CrossFit to Reebok.

Both brands were at an inflection point. CrossFit, a high-intensity exercise regimen created by Glassman to practice functional movement, had outgrown its former arena, a ranch in Aromas, California. For the first time, the CrossFit Games would be hosted at the Home Depot Center in Los Angeles to accommodate the growth of the sport. At the time, CrossFit had been gaining popularity for a decade. CrossFit Inc. was incorporated in 2000, but Glassman’s program was first picked up in 1995 by a police force in Santa Cruz, California, and later by visitors to CrossFit.com, where anyone interested could find a new workout posted each day. But with  about the potential dangers of the demanding sport and little infrastructure, word of mouth had yet to build a following as strong as any of its component activities (Olympic lifting, gymnastics and aerobics). Reebok was on its way out of American football as it radically shifted its focus away from sports and back to its fitness roots.

“When [Reebok] was the most powerful and meaningful … it was centered around fitness,” says Yan Martin, vice president of brand management at Reebok. Fitness in 2010 looked a lot different than it did in the 1980s, though. Women had ventured outside the mirrored studios where they once did step aerobics and had begun to make their way toward the dumbbell rack. While Reebok wanted to leverage the equity it had in its women’s fitness category, it also wanted to carve out a place in the modern fitness market.

“Our president, at the time, was working out at CrossFit New England and came back one day and said, ‘This thing is amazing. It’s what fitness will be for years to come,’ ” Martin says. 

Meaningful fitness—exercise that lets people discover their potential—and community orientation were two tenets that Reebok identified as central to both modern fitness and CrossFit. “We felt it was a perfect fit based solely on purpose,” Martin says.

That summer, Steve Weiss was among the team from CrossFit that traveled to Reebok headquarters in Canton, Massachusetts, to learn more about how the two brands might work together. Initial conversations mentioned nothing of licensing, revenues or business synergies. Rather, the brands talked about shared values. “They really convinced us they believed in CrossFit as a lifestyle and a fitness program and they wanted to help elevate that movement rather than just trying to sell apparel,” Weiss says.

Although the brands meshed ideologically, a business case had to be made as well. CrossFit was seeking a title sponsor of its annual games as well as global infrastructure to grow the sport. (In six years, the number of CrossFit affiliates has grown from approximately 1,500 to more than 12,000 in 150 different countries). Reebok would in turn get exclusive rights to create CrossFit-branded footwear and apparel and an authentic position in one of the fastest-growing movement in fitness. “Reebok was using CrossFit as a lighthouse as they transitioned away from team sports,” Weiss says. The brands penned a 10-year deal, and Reebok took its first step in pursuit of the “Fitness Generation.”

Putting Faith in the FitGen

CrossFit was the first of four strategic partnerships Reebok would go on to make with athletic brands aligned with the FitGen—a segment, or “tribe,” defined by Reebok as, “a generation hungry to get back to the basics.” Following CrossFit with obstacle-course race series  and group fitness studio  in 2013, then mixed martial arts promotion company the following year, Reebok rounded out its “tough fitness” category. 

The next year also saw the debut of a new logo, the Reebok Delta, whose three sides represent the physical, mental and social transformation people experience when they commit their lives to fitness. As president Matt O’Toole described it in a press release that year, “It’s not a logo, it’s a symbol … a way of life.” The lifestyle of fitness is what sets the FitGen apart from those that came before it. “What we’re seeing is that what we call the Fit Gens—the consumer who’s typically in their 20s whose entertainment is working out—they’re responding to our version of fitness, which is much more challenging but also much more social,” .

With a core group of partners assembled, Reebok debuted its multichannel “Be More Human” campaign on Super Bowl Sunday in 2015. The TV spot, titled “Freak Show,” features everyday people flipping tractor tires, leaping over flames, and stepping in unison to a high-intensity instructor, but also fighting fire in a burning building, playing patty cake with their kids and maneuvering in a wheelchair. According to the narrator: “We do it to get better. Period.”

“One thing that’s hard on the fitness and training side is capturing emotion,” says Ellen Schmidt-Devlin, director of the University of Oregon’s sports product management program. That’s why brands often use sport to create an emotional association with their products. That Reebok figured out a way to use training to capture emotion is one reason Schmidt-Devlin believes the campaign is effective.

“The intensity, the visuals: this is beautiful stuff, but this is millennial marketing,” says John Rowady, CEO of Chicago-based sports marketing firm rEvolution. “[Millennial marketing] is about custom human experiences. … ‘Be More Human’ is this general cast on trying to study and target the millennial audience. Reebok is trying to intermingle lifestyle, fashion and competitive sport. They’re trying to say, ‘Life in general is a sport.’ ”

If Reebok needed a foundational segment to which it could sell its new definition of fitness, numbers would suggest they’ve tapped into the prime patrons of the fitness industry. According to the , 76% of regular exercisers are 18-34 years old. A  reported that 69% of millennials believe physical competitions are a good way to keep fit, and 77% would like their workout to be as interactive as possible.

“I think there’s a lot of trust and loyalty with this generation of buyer,” Rowady says. “If you’re listening to them, you’re part of the community, you’re born in the space and you’re what they feel is the legitimate company that is part of their lifestyle, they’d rather reward you over another brand.”

That’s what Reebok is banking on as it competes in a fitness category whose customers are no longer the fringe. “We feel we play a big role as community participants,” Martin says. “We understand that we were the first mover in the marketplace. … What makes our company unique is the fact that we are our consumers.”

Among the more than 10,000 CrossFit-affiliated gyms that have opened since Reebok and CrossFit joined forces, 108 are co-branded Reebok affiliates. Reebok CrossFit One, the 500-member affiliate located on Reebok’s campus in Canton, has become a place of pilgrimage for CrossFitters around the world. “We had Katrin Davidsdottir (female winner of the 2015 Reebok CrossFit Games) here last week,” Martin says. “[Reebok CrossFit One] has become a symbol of how authentic the relationship is between CrossFit and Reebok.”

Reebok’s CrossFit-branded products are a manifestation of the community, as well. Whether it be Kevlar-infused shorts to protect against barbell abrasion or the ever-evolving CrossFit Nano—a shoe designed for diverse workouts allowing athletes to run, jump, weightlift and rope climb in the same pair of shoes—every product takes a consumer-focused approach, says Mike Kratochwill, senior director of training and CrossFit asset marketing for Reebok. “We have hundreds of hours of video of top CrossFit athletes sitting with our developers, designers and marketers talking about what they like and don’t like. All of our product is designed, developed and executed by someone who does CrossFit here at Reebok.”

Competitors Take Aim

In April 2015, Nike released the Metcon 1, a competitor cross-training shoe to Reebok’s CrossFit Nano. Because of CrossFit’s trademark status, Nike, like any brand other than Reebok targeting the CrossFit consumer, can’t market or describe the Metcon or its successor, the Metcon 2, with the word CrossFit. But that hasn’t stopped the powerhouse brand from trying. With its own sponsored CrossFit athletes, such as Lauren Fisher and Mat Fraser, Nike has taken an interest in Reebok’s brand of competitive fitness. Days prior to the 2015 Reebok CrossFit Games, (during which athletes were required to wear CrossFit-branded Reebok shoes and apparel) Nike released a version of the Metcon 1, designed as an homage to the Air Jordan 1, which Nike calls its “first outlawed shoe.” “During the biggest event in the world of high-intensity training, our athletes have been banned from wearing the Metcon 1,” Nike said in a product description below the words, “Don’t ban our shoe. Beat our shoe.”

“Nike is the classic guerrilla marketer,” Rowady says. “Nike invests and gets into marketplaces that other people start. They want to be dangerous enough to understand the space and target audience, and if it goes well, they’ll want to be further in.” The scale of Nike’s resources make it a tough competitor in any category it chooses to enter, he says, so the challenge for Reebok will be the balance between building an endemic reputation for itself in the CrossFit category and protecting its market share. “The question,” Rowady says, is, “Does Reebok need to be an owner rather than a sponsor to really protect their long view, in the way that Vans owns their own events?”

But for the next four years, at least, no amount of marketing can wrest from Reebok its exclusive rights to the CrossFit trademark. “It’s tough for competitors to compete with the position Reebok has,” Schmidt-Devlin says. “Every other brand needs to come into [the CrossFit] territory and define it differently.” In lieu of carving out their own CrossFit categories, competitor brands, she says, will either align CrossFit products with another category in which they’re strong, such as running or basketball, but this can make the products more gender-focused. “Reebok defined CrossFit in a space where there’s equal respect [among the genders]. It’s a niche between fitness and sports, and in that niche, there’s equality and empowerment. Gender doesn’t matter,” she says. 

That niche creates both a safety net and a ceiling for Reebok in the adidas Group and the athletic apparel market. “Reebok’s not really Reebok any longer,” Rowady says—at least not the Reebok it was at its height. “It’s a niche brand under the adidas portfolio.” As such, Reebok’s role is not as a contender with Nike, Under Armour or other brands of their size. Rather, it fills out the specialized segments for adidas Group, he says. While training is one of adidas’s key categories, CrossFit and Reebok’s other brands of tough fitness diversify the portfolio enough to make their own category.

“Reebok had to have made a determination to move into a place where they’d have few competitors so they could own the space and be heard,” Rowady says. “Reebok can be relevant and define a sustainable growth pattern for the brand in the [CrossFit space]. And I think that’s what they’ve done.” 

The Numbers Story

Profound. That’s the word Kratochwill uses to describe the impact CrossFit has had on Reebok. Kratochwill has been with the brand for eight years and seen its transformation catalyzed by its partnership with CrossFit.

Since Reebok became the exclusive licensee of CrossFit’s trademark and the title sponsor of the CrossFit Games, Reebok’s training category has nearly doubled, composing nearly 34% of the brand’s net sales. Q4 of 2015 marked the 11th consecutive quarter of growth for the brand overall and the third consecutive year of double-digit growth for its training category, of which CrossFit is a big driver Kratochwill says.

The numbers suggest CrossFitters and cross-trainers are beginning to trust Reebok to outfit their fitness, but across all its categories, the brand’s sales have hovered between $2 and $3 billion since 2006, while adidas Group overall sales have trended up by about $6 billion.

Last year, adidas Group had to quash speculations that it would divest Reebok.

“Can Reebok leverage their leadership in [the CrossFit] category to rebuild their brand? I don’t know,” Schmidt-Devlin says. “It would be interesting to see if people believe enough in their products to say, ‘I trust you for CrossFit, now I trust you for my running shoe or my sports bra.”

Apparel is one area where Reebok is particularly optimistic about growth. Since 2012, Reebok’s overall apparel business has grown 19% year-on-year. “Apparel is key,” says Dan Sarro, corporate communications manager at Reebok. “Traditionally Reebok had been heavily a footwear brand with a lot of our apparel in licensed business, with the NFL, for example. Branded apparel wasn’t really there. The new partners we have have generated a huge increase in our apparel sales so we’ve become a footwear and apparel brand the way we want to be.”  

Just as important to Reebok’s viability is the growth of CrossFit as a brand and a sport, which will depend not only on how many gyms open up, but media sponsorships and how much airtime the games get on television. Thus far, in Rowady’s estimation, Reebok has yet to truly break through the growth ceiling it’s been under for a decade. 

“You run the risk of really destroying the brand by uncoupling it from the much broader strategy Reebok had,” he says. “They seem to have stabilized and made sure they didn’t have any massive downturn in their sales by refocusing. That’s really hard to do.  It’s also very difficult to find something that’s increasingly more popular that matches with their original roots. The real question is, will CrossFit continue to grow and have expansive audiences? I feel it’s going to be a long climb to continue to grow that fan base.”

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Talent is one of the biggest costs to a business, even more so when it’s unfilled. In 2014, for each position that remains vacant for three months or more. More than 16% of businesses say that cost can exceed $25,000.

The middle market is one sector of business where talent acquisition and retention is particularly challenging. Nearly half of companies with annual revenues between $10 million and $1 billion report that they don’t have enough talent to fill leadership positions, according to surveys of more than 400 middle market C-suite executives and more than 600 members of the middle market talent pool by the National Center for the Middle Market and the Novo Group compiled in the report “.”  

“When you have important roles left unfilled, that costs the company money. When you’re hiring, you want the best. The difference between an A player and a B and C player can be significant, especially in a thought-leadership era,” says Leah Burdick, vice president of marketing for recruitment company Hudson RPO. â€‹

An “employer brand” is defined by Hudson as the perception of an organization as a great place to work by both current and prospective employees. Though a business can do much to define itself as an employer brand, certain inputs such as Glassdoor reviews can also shape the brand, positively or negatively, outside the employer’s control. 

Burdick, who co-authored “,” says employer branding has been part of the business lexicon for a while, but is still not executed by many companies. “A lot of marketers aren’t even aware of [employer branding]. They’re so focused on the corporate brand. Marketers need to understand it affects the corporate brand. They should take it very seriously.” Only 25% of those surveyed reported to the National Center for the Middle Market that they had strong employer brands.

83% of middle market executives believe their company’s well-defined employer brand helps keep top talent off their competitors’ payroll 

The National Center for the Middle Market survey confirms: 79% of middle market executives believe a good employer brand is essential to their company’s ability to attract top talent, and 83% believe their company’s well-defined employer brand helps keep top talent off their competitors’ payroll. 

The employer brand is a critical tool for middle market companies to catch the attention of passive candidates, those who are already employed, not looking for a change and constituting 60% of the candidate pool. The Novo Group found that 63% of companies that grew more than 11% in 2014 made a commitment to recruit passive candidates.

“If one of the things middle market companies can offer is growth, the ideal candidate is someone who’s established themselves in a larger organization but is looking to do more,” says Larry Inks, clinical associate professor of management and human resources at the Ohio State University and co-author of the National Center for the Middle Market study.

As important as the employer brand is the employee vale proposition (EVP), a handful of unique attributes of working for a company. Elements include compensation, benefits, job security, company culture, meaningfulness of work, quality of work environment and associates, recognition and awards.

64% of surveyed executives consider compensation an attractive aspect of the EVP while 49% say both growth opportunities and work/life balance attracted their attention to middle market firms 

While compensation is one factor that middle market firms sometimes struggle to match larger companies on, Burdick and Inks agree the middle market has much to offer employees. “Pay is not the top priority for everyone,” Burdick says. “Flexible work time, better vacation time, better maternity leave, the ability to work from home … those are things that are meaningful to an employee.”

Role expansion is another card middle market companies can play to attract talent away from their Fortune 500 competitors. Just 64% of executives surveyed for the “Building the Top Team” report consider compensation an attractive aspect of the EVP while 49% say both growth opportunities and work/life balance attracted their attention to middle market firms. And 75% of middle market executives agree that the quality of their colleagues is an important component of their EVP.

Only 25% middle market companies have strong employer brands and EVPs

“Generation Y is looking for growth opportunities, to advance quickly, corporate social responsibility and work/life balance. Middle market and small companies have an opportunity to really engage that,” Inks says. The report provides a case study of Jeni’s Splendid Ice Creams, which offers its employees a month-long sabbatical after three years of employment.

“The bottom line is, in larger organizations, it’s a little tougher to be flexible and change policies. Smaller organizations can be more nimble and customize their offerings to match what millennials are looking for,” Inks says.

Businesses with strong employer brands saw revenues increase by 20% while firms with weak employer brands grew 8%

“Building the Top Team” shows a correlation between strong employer brands and organization growth, both in revenue and workforce. Burdick likens the financial impact of the employer brand and EVP to the cost of customer acquisition. “If you have a more compelling employer brand, the cost per hire is likely to decrease as well as the turnover rate,” she says. “Likewise, when you have a strong employer brand, you’re more likely to attract employees who are a cultural fit [and] will stay longer.”

The report found that businesses with strong employer brands saw revenues increase by 20% while firms with weak employer brands grew just 8% on average annually. Similarly, strong employer brands correlated with 12% workforce growth while weaker brands correlated with less than 5% workforce growth.

For the majority of the middle market without a developed employer brand or EVP, there are steps that can be taken to facilitate the search for top talent. The report suggests six best practices:

1. Recognize that all firms have employer brands, whether they know it or not.
2. Brainstorm ways to strengthen and differentiate your brand and EVP.
3. Create an authentic and genuine brand and EVP.
4. Involve your marketing department in the process.
5. Clearly articulate your EVP to current and prospective employees, considering where each will encounter your brand (on the Web, social media, employment fairs and in tools your organization uses internally).
6. Make use of your brand and EVP in your recruiting efforts.

Burdick suggests starting with an audit of your company’s reputation to see how you measure up to your competition and to compare what the business believes its employer brand is and how employees describe it. Glassdoor is a common venue for this information, but internal surveys—so long as they provide adequate anonymity—can provide valuable insights. “Employer brand is like the corporate brand,” she says. “It has to be authentic. You have to deliver on the promise or all of your spend is wasted.”

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A Pivotal Juncture

According to the , American companies are at a pivotal juncture. Over the postwar period from 1947 to 2013, the trend for economic growth in America was 3.3%. But since 2007, the rate has downshifted to a mere 1.5%, which translates into a meager 0.7% in growth per capita in the United States. Even more troubling, the nonpartisan Congressional Budget Office (CBO) projects that growth will only average 2.5 % over the next 10 years and drop off to 2.0% at the end of the period. 

The global economy is not doing much better. In an important speech, International Monetary Fund chief Christine Lagarde warned us of a coming “new mediocre” era. She cited that the global economy is at an important “inflection point.” She calls for governments and firms around the world to recognize this trend, and make changes to see if we can build new momentum.

What’s disturbing about this situation is that we have the means to move the needle. American firms are sitting on a historically high level of cash. Based on numbers from the Fortune 100 in 2013, American firms alone are sitting on 3.6 trillion dollars of cash. Cash has become one of the least valuable, and most available, assets. Instead of investing, many firms have become more proficient at cutting cost, often at the expense of value-creating mechanisms such as R&D, marketing and long-term investments.  

A Shift in the Fundamentals of Capitalism

Renowned scholar Philip Kotler has recognized the implications in the shift away from Main Street to Wall Street. In his new book “” he addresses issues that indicate that capitalism itself needs to “get back on the rails”. 

He suggests that our current focus on the creation of wealth for shareholders has severe implications, including the persistence of poverty, income inequality, problems with job creation, higher social costs of doing business and a short term orientation among others. Somehow, the focus of firms needs to return to the creation of value in the marketplace, and move away from  â€œmaking the quarter” at all costs. 

When you move the focus to the short term, any strategic investment that doesn’t pay back immediately often ends up on the chopping block. So are investors bad for business? Clayton Christensen of Harvard University was part of a special section of the June 2014 Harvard Business Review which sought to answer this question. This spotlight section of HBR pointed out that if investors become your total business focus, they can be toxic. Christensen went on to question just why firms are hoarding cash, when they have so much and so much more is available. He points out that “the tools we use to guide our investments are blind to the best opportunities for creating new jobs and new markets.” 

Firms are forgetting why they were created in the first place. In his book Start With Why, Simon Sinek calls firms to remember—or in some cases to discover—why they exist in the first place. As firms were created, they usually began with a connection to an unserved, and perhaps unarticulated, need in the marketplace. This also brought the opportunity to create value with and for customers, and good jobs and a great workplace for employees. He calls for firms to get back to the “Why” that got them started in the first place. Good idea.

Past Tactics are Not Working

A fast answer for many firms: leave growth to someone else, buy it or jump into a fast-moving emerging markets. Many firms are now colliding with the reality that the tide is not rising all that fast for the middle class in China. Firms can’t simply count on rapid growth of markets in Brazil, Russia, India and China (BRIC). Making acquisitions work to drive growth is a tricky business and fraught with failure. Ken Favaro, David Meer and Samrat Sharma in their 2012 Harvard Business Review , “Creating an Organic Growth Machine,” reported that only 36% of acquisitions realized enough cost savings to cover the premium they paid. And for the other 64% the annual total shareholder returns are on average negative 2%.

Push it to the Lowest Level?

Researchers also point out that firms can lose their growth focus when corporate leaders delegate the pursuit of organic growth “downward” or “outward.” Push everything down to the business units closest to the customer. Seems right in theory. But as we’ve seen many times, the “coalface” managers have to be focused on the shorter-term opportunities tied into their current business. Big innovations for the longer term, which might require mobilizing resources across the firm, are just not their job. Real growth stalls at the tactical level. Ultimately, too much decentralization can result in the dilution of resources, and end up eliminating talent, knowhow and the fundamental ability to create and harvest value. To drive real growth, and address bigger and less “linear” opportunities, a more balanced view and mix of investments is needed.  

Returning to What Capitalism is All ÂÜŔňÉçšŮÍřt

It was  who said: “The purpose of the business is to create a customer. The business enterprise has only two basic functions: marketing and innovation. Marketing and innovation produce results, all the rest are costs. Marketing is the distinguishing, unique function of the business.” In light of a current loss of focus on these areas, we’d suggest three pathways forward:

1. Put the customer back at the center of business. Value is NOT created on Wall Street. Real economic growth is driven by firms as they connect to customers and build better alternatives for them. This is the very essence of what capitalism is about. Some fundamental elements of capitalism are coming unraveled, and it’s time to knit them back together. This is a call to arms for chief executives and their marketing teams: bring the customer back to the core of corporate strategy. 
2. Release the hoard of cash and invest in growth. Cash is an abundant resource, sitting on the sidelines and creating little value. Now is a time to invest in value-creating mechanisms that can drive market-driven innovation, and tools and techniques for better understanding opportunities that add value. Return to the essence of what business is all about. 
3. Marketing and innovation need a voice on Wall Street. Many activist investors seem to be experts at splitting up firms into pieces for fast “value harvest.” We hear all the politically correct terms—sizing, restructuring, streamlining—meaning careers often ended. Where is the voice and support for innovation that drives growth and creates jobs? In our view, Wall Street needs a fundamental re-education on how value is created between suppliers and customers, how this drives the top line and how that more directly ties to the value of their portfolio in the long-term. This is a call to arms for marketers and the marketing profession to take a stronger hand in educating Wall Street on what customer value is, how it’s quantified, how it’s communicated and how it can be effectively harvested. All of these are the very basics of business, and they seem to be adrift in current market conversations. This is a  call to CEOs to return to the reason their firms were created, and to liberate cash to create new value where value is created: with customers. 

Take Back Your Business 

Although there are many changes going on in the marketplace, the fundamental mission of a firm remains to identify, create, demonstrate and document value for customers. When this is done well, the shareholders—who  provide the resources necessary for the firm to live—always  succeed in the long term.

It’s time for CEOs and marketers to return to the basics and equip firms to better understand, create, deliver and harvest value in the real world. To invest in a longer-term view and make the customer the central part of the equation. We challenge corporate America to liberate cash to do so. You cannot hoard your way to growth. 

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With all the fascination with new marketing concepts, digital technologies and new tactics, there continues to be one foundational issue that is proven and reproven to have a disproportionate impact on the value you create for your business: identifying the highest value source or sources of growth for your brand, product or service. Choosing the wrong target, or one of less value, will certainly lower your growth and return-on-investment potential. It might even fail completely. Traditionally we called this market segmentation but lately, many of the most successful marketers refer to it as “demand landscape mapping.”

There are two critical questions to understand about this subject: Why is this so critical, and how can I do it much better?

In April 2016, the ÂÜŔňÉçšŮÍř unveiled its new intellectual agenda founded on seven big problems impacting marketing. These seven problems were identified through the rigorous collaboration of practitioners, researchers and experts. Of course, the nature of the industry shifts rapidly. With this in mind, the ÂÜŔňÉçšŮÍř is consulting industry experts to continue the discussion.

Do these seven problems capture the full scope of marketing’s changing landscape? Addressing the first problem are seven experts speaking for various parts of the industry. Take quiz below to see how your firm is doing.

Author of  and faculty at Columbia Business School

“Is the CMO now the Chief Commercial Officer? For many businesses, the answer is yes. For years, the role of marketers has primarily been to drive demand for existing products and services through customer acquisition and retention. Today, dramatic changes driven by digital and other factors are forcing businesses to look for new sources of growth as old competitive advantages rapidly decline. Marketers are being tasked not just with “selling our stuff,” but with helping a firm transform its value to the market. If the unique role of the marketer is to keep the business focused on its customers, then an essential job of today’s marketer is to discover the next generation of products, services and experiences that can bring value to its customers and earn value for the firm.”

Chief Growth Officer at 

“Need-based targeting is a great way to start. Find the market you want to serve and address its needs. Creating a product in isolation is risky—how do you know it will appeal to anyone but you? The best way to reach a market segment is to understand where that segment “lives.” Brands need to refine their stories, tell them well and communicate them in ways and places where consumers will respond. This is different for each market, but every market is reachable.

We all take positions: in our families, at work,  online. Products need to do the same. Maybe a product is not for everyone. Is there a spin about the design? Is it organic and non-GMO? Is there a celebrity endorsement, or is the focus that it is made by a 3D printer in Brooklyn? There are always stories to tell. Find your story and tell it.”

Chief Growth Officer at 

There is no doubt that the best way to grow as a company is to understand the behavior and desires of your customers. If you don’t know who to target, you can’t properly address their pain points or provide any real solutions to their problems. 

Paid advertising might bring some quick ROI, but not being sure who to target will hurt you in the long run. Focus more of your time on getting to know your customers through surveys and personal outreach to get inside their heads and understand their needs.

By seeking feedback and tweaking your products and services based on their suggestions, you will create a real bond that extends far beyond the experience most customers have with businesses. You will create a human connection that is desired in a world of automated customer service.

Katrina Craigwell

Global Director of Marketing Innovation at

Relevance is important to us because of the impact of GE technology, whether it’s power generation, aviation or health care. We have an incredibly wide footprint globally. Even if you are not in the market to purchase a jet engine or a locomotive, chances are that some part of your day has been impacted, hopefully optimized, by GE technology.

We think about the next generation of talent or the people in the current generation who we haven’t been able to reach yet. In the U.S., we’re thinking about how we tell that story to current and future shareholders. We’re also trying to think more broadly about the spheres of influence that affect the short list of people who might buy a jet engine or a gas turbine. 

Scott Davis

Chief Growth Officer at Prophet

Most companies spread themselves too thin when trying to grow their business. They try to land a small share from a few large customers, a little more from repeat customers and round it out with a couple of new customers. But a smarter approach is to focus on targeted segments. Harken back to the first day of business school and applying STP: segmentation, targeting and positioning. 

When working with clients, we focus on the target segments that we believe will ultimately drive disproportionate margin to their bottom line. By taking a smart segmented approach, you will be able to tag and segment customers in your database and be very intentional about whom you’re offering your best “self” to, which will maximize your chances for success and grow your bottom line. 

Ryan Gum

CEO at Attach

A lot of marketers take a “wide net” approach to growth. They get excited by new technology, channels and opportunities so they end up trying a little bit of everything. Experimenting is great, but if you don’t give yourself the focus and commitment to dig a layer deeper, you’ll end up scratching the surface and never find out what really works. If an experiment fails, it’s a lot harder to figure out why than to move on to your next exciting idea on the list. To effectively find and target growth opportunities, you have to focus on one thing and truly learn from your experiments before you can expect high-growth results.

Founder & CEO at

There are dozens of high-value sources of growth, and that is a gift and a curse for growth-focused companies. The key is to implement a system that rewards high-tempo testing of a variety of channels, and from there, have the discipline to focus on the channels that work best. 

The best growth strategies are rooted in a thorough understanding of and appreciation for the target audience. This helps make the right initial assumptions so you can concentrate testing in the right places; not just where the target audience spends time, but where they are in the optimal mindset for your messaging and offers. Marketing is an exchange of value. If you try to be everywhere, you’ll be nowhere. Go where your audience spends its time, where customers want to hear from you and where they’ll respond to you. 

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This year’s political primary season reminds us of the basic, indeed fundamental, importance of social values when it comes to understanding consumers. We have long overlooked them in favor of things like digital technologies, niche needs or real-time micro-moments to structure and calibrate our understanding of what motivates people. But the successes of Donald Trump and Sen. Bernie Sanders have put social values back in play.

There was a time when social values were front and center. The confluence of post-World War II prosperity and the coming of age of baby boomers made the 1960s and 1970s a time of enormous change in social values. Marketers had to look beyond business categories and retail channels to connect with consumers around social values.

Last year, , namesake of the famous research firm, published his memoir, . In it, he recounts the work he did for clients like the Institute of Life Insurance, Fortune magazine, CBS News and the JDR 3rd Fund. All of it focused on the commercial implications and corporate responsibilities tied up in the swirling shifts of social values at that time—marriage and family, women’s roles, work ethic, nature and the environment, authority and rules and self-expression. Yankelovich began a service to track the emergence of new views about these values, dubbed the “New Values.” Whatever else brands might do, they first had to find a way to connect with these new social values or be left behind.

It is striking that these very same social values are motivating decision-making yet again. Using demographic patterns and social attitudes, Ron Lesthaeghe and Lisa Neidert of the have coded every county in America by its position on social norms. The normative dimensions used to score counties are exactly the ones that Dan Yankelovich was tracking four and five decades ago. County-level voting analysis finds that Trump’s level of support in a particular county is extremely well predicted by the kinds of social values characterizing that county. This has led to a lot of crossover voting that goes beyond party affiliation or litmus-test issues.

SEE ALSO: Is Hillary Clinton’s ‘Terrible Brand’ Hurting Her Campaign?

Obviously, politics is not shopping. But what has bubbled up during the primary season is a societal divide that has grown wider in recent years, due in no small part to the Great Recession. The assumption that U.S. consumers share a sense of belonging to the same marketplace of exchange, whether ideas or goods, has been shattered by the raucous rallying around Trump and Sanders. These candidates give voice to a pent-up discontent that people have for business as usual. The divisions on social values are bigger than previously recognized and appreciated. There is no unifying narrative of engagement and affinity that connects people to the marketplace. At the very least, there are two such narratives, and maybe more. Each gives people a different sense of what the marketplace has to offer that is in keeping with their social values.

Perhaps the biggest takeaway from this political primary season is how little things change. Despite everything that has happened since the 1960s and 1970s, the same issues are back on the table. Not just conflict over social values, but the identical social values. What’s center stage today has been in the spotlight before. By the late 1980s, Yankelovich had quit tracking the emergence of the New Values. It seemed as if that battle had been fought and won, but it was only an uneasy truce.

Yet while the issues are the same, the marketing strategies will have to be different this time around. When the New Values were first roiling the marketplace, marketers celebrated these values and tried to reflect them in their positioning and advertising. Traditional values were not aspirational for anyone. Nowadays, consumers are split on aspirations. What makes a strong connection with one mind-set about social values will antagonize the other, not simply fail to resonate.

SEE ALSO: Jeb Bush’s $130 Million Marketing Fail

Increasingly, brands face a tough environment for making relevant connections. More than ever, consumers are bringing social values with them to the marketplace, not just the polling place, making this a key element in their decision-making. Even trying to respect the diversity of opinions as a way of accommodating consumers of all stripes will be difficult to sell to consumers whose social values lean toward conformity and respect for authority and rules.

Social values are once more a challenge for marketers, but in more complicated ways. What was thought to be settled must now be put to bed again.

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Now on his second tour of duty with the company, Frawley’s tech roots run deep. He’s written extensively on growing customer experience and engagement in his 2014 book Igniting . Since taking the helm at Epsilon, Frawley has focused on steering the company toward becoming a global marketing powerhouse by tapping into the deep data it’s gathered for brands. While most of Madison Avenue talks a big game about building out their data components, Epsilon has done it, and is now reaping the rewards for its clients. 

Q. You have an impressive marketing pedigree. How did you get there? 

A. I like to think that it was a brilliant strategy but, the thing that’s interesting about my background is I actually went to work at Epsilon in the mid-80s, right out of university, and did my basic training there. Epsilon was, and still is, a great place to learn about Big Data, analytics and how to do highly targeted marketing. Obviously the tools and techniques we have today are very different than they were in the mid-80s, but a lot of principles are the same. That sort of basic training enabled me to do a lot of different things in the 20-odd years when I left Epsilon the first time and when I came back seven years ago. The notion of how you apply technology, data and creative to improve the business performance of brands by marketing to their clients—I’ve done that from a management-consulting standpoint, I’ve done that from an enterprise-software standpoint and then obviously here at Epsilon in the last seven years bringing all that together along with content creative agency services. It wasn’t my plan 30 years ago, but it’s worked out really well.

Q. A lot of agencies are playing catch-up with building their data components. Epsilon is in a good position, having the resources it needs when it comes to data. What can a data-rich marketing department do that others cannot?

A. There’s a lot of evolution going on, but we believe that Epsilon can understand consumers better than anybody else in the world. That comes from our very rich set of third-party data, which marries classic demographics and psychographics with a lot of cross-category purchase behavior that we’ve simulated. It obviously leverages our very unique competency, particularly versus agencies, to build and manage first-party data, which is critical to this new world. Through our conversant assets we have more and more understanding of how consumers are consuming media—you  know what they’re seeing as they traverse the mobile and social web channels. You put that together and it allows you to complete the process. 

Over the past five or 10 years, there’s been a lot of talk of engagement [and] how we engage with our customers. Our view is that engagement is table stakes now. The ability to engage, make those connections with customers in a cross-device, multi-screen environment. I won’t say it’s easy, but it’s very possible. The question is, once you’re engaged with them, how do you activate them? How do you get them to do the thing you want them to do, whether it’s open, buy, click, re-buy or refer? That’s a lot more about emotions than it is about engagement. How do we create that emotional connection between a brand and a consumer at that moment in time that they’re more likely to respond or act the way you want them to? That’s what the data allows us to do. It allows us to understand contextually how people are feeling about a brand, what is the thing that–whether it’s rich content or some sort of an offer, or some sort of prestige that comes out of a loyalty program–what is the thing that’s going to make them activate? 

The other thing it lets us do, versus a traditional agency model, is when we deliver a creative brief, we do research like other agencies. But because we have this large third-party data asset, when we deliver a creative brief, we also deliver the three million who are most likely to respond to that message. It’s a very different approach. Being able to actually produce analytically driven audiences that go with each creative strategy is a critical differentiator we have versus other agencies.  

Q. In your book, you talk about a formula: return on experience times engagement, or ROE2. What does this formula mean and how is it important to marketers?

A. When [I] wrote the book [with Epsilon] we set out to try to understand experience. What we learned as we went through the process of experience is it equals emotions and, in many ways, engagement. If you have people who are very engaged with a brand—for  example very active with the brand, but also very emotionally connected with the brand—how do those customers behave versus other customers? 

We did a bunch of primary research specifically for the book that really looked at the relationship and the ability in the correlation between those two things and your ability to predict brand or business equity. We measured it across a number of different financial measures. What we saw was this very compelling two- or three-times correlation between somebody who is engaged with the brand—which a lot of companies measure—and emotionally connected to a brand—which fewer customers measure at the consumer level. Those are people you really want to spend time and energy marketing to. 

The other thing that we exposed is how you create those connections. What are the steps you can do to create an emotionally connected consumer and that we feel should really guide a lot of marketing strategy as people or brands think through the audiences or segments of consumers they want to spend time and money on? Ultimately it’s a question of where you spend your marketing dollars and how you move them through this high level of engagement and experience. And the squared [in ROE2 equals] the return on engagement experience.  

What we’ve really found is that if you look at marketing through this lens, you do very different things than if you look at it in terms of how we connect with companies and consumers and become engaged with them. 

Q. What’s the biggest misconception brands tend to have about their customers?

A. It comes in a couple different categories. One is, it still amazes me the urban legends that persist based on some set of data that’s been exposed over five, 10, 20 years. When you apply real hard data to it, it’s almost always wrong. 

I was with a retailer not long ago talking about how to apply some of these concepts to merchandising. The realities that things like men’s clothing are often not bought by men was a fact that the merchandisers hadn’t fully internalized as a very basic thing.

I think the other misconception today is, the brands don’t control the flow of communication with the customers; the consumers do. But most brands’ marketing programs still act like it’s a very campaign-centric model where the brands act like they control the cadence of offers, messages, communications and incentives. It’s very different now. The consumers control that.

Another term we use in the book is “atomic moments of truth,” which is being able to understand and predict when the consumer is going to be accessible and, in the atomic moment of truth, find the most appropriate communications strategy. It’s a complete shift in the balance of power. But until brands recognize that, they [think,] here’s my campaign calendar, and I’m going to do TV, and then I’m going to follow it up with some experiential stuff and I’ve got a direct stream. It’s completely opposite of how consumers view things these days.    

Q. Today’s consumers have a lot of options and are exposed to a ton of targeted messaging. There’s also a certain level of sophistication and immunity to overt marketing. How loyal can today’s customer truly be?

A. I’m probably a little biased because we run some of the largest loyalty programs in North America. We run the Walgreens program, we run the Hilton Honors program. The principle of loyalty is still very powerful and works well. And again, it ties back to that emotional connection. The reason people are loyal is honestly less about offers about communications, and it’s more about creating the emotional connection with a brand. In a loyalty program, that’s why you have different levels of prestige—in the airline programs, that’s why you get upgraded to first class if you’re very loyal. It’s those sorts of emotive things that are actually much more powerful in creating a long-term connection with a brand. … Once you get there, the value of those customers is dramatically higher. Loyalty is still out there and you can pierce the veil, so to speak, but there’s a certain amount of immunity to the communication that’s there. The way you break through that from a communications standpoint is [by delivering] communications at the right time that are relevant and activate that emotion connection. 

Q. We talk a lot about the growing dominance of mobile, the right way to run e-mail or social media and traditional marketing fundamentals. It can seem like you’re going in a lot of directions at once with no center. How do you incorporate balance into your marketing?

A. Measurement, honestly. We work with our clients to really have that core point of view around, as best we can, what’s performing and what’s not. From our point of view, a lot of marketing is around how the budget gets allocated, whether that’s allocated by segments, whether that’s allocated by channels or whether that’s allocated by products. We have points of view around the best ways to do that, but we try to bring it back to how you’re spending the money. If you had another dollar to spend, which customer would you spend that on, which channel would you deliver that through, what would you want them to do? If you bring it back to that, it’s a very unifying concept. Where it fragmented is where there are 23 different budgets that are allocated differently and they don’t ever come back to some level of truth around what’s working and what’s not working?    

Q. How can you create personalized marketing messages to customers without scaring them or turning them off in some way?

A. There’s no single answer to that. The reality is every consumer has a different level of tolerance to that. Having a single canonical rule won’t work. There are people who will take every message that you give them and look at it, and there are people who will opt out the first chance that they get. The first part is to have some point of view around segments of your consumers, developing audiences with the recognition that people will have different tolerances, and that can only be determined through test, lure and measurement strategies. 

The other part is you’ve got to send them something they’re interested in. If I’m on the web comparison-shopping for golf clubs and I see a banner ad that talks about a deal on the new Calloway hybrids, that’s something that’s probably interesting me. It’s probably even more interesting to me if you know I’m a golf enthusiast and I play more than 50 rounds of golf a year. It really is about that notion of audience development at a very fine-grain level paired with content that’s interesting. The place that I think the really creepy factor comes in is some of the retargeting that’s done these days where, once I click on that golf club banner, it follows me around the digital world for several days. Clients are realizing that that sort of strategy really doesn’t work.

Q. How should brands talk to their customers about data collection?

A. With full transparency. We recommend all clients have a very open and transparent data policy where we tell them how we use the data. We only do permission-based work, so anytime we’re sending you an e-mail, for example, it’s a permission-based e-mail. Anytime we show a display ad, you can click on it and understand why you got it. Companies can do a certain amount of that themselves, and they absolutely should. I think as an industry there will be more of that: More standards and more ways to provide transparent use and access to the data. We’re fully transparent with our consumers around our third-party data and what information we have. They’re able to get it and see and correct and opt out of it if they want to. We think regulating that is a hard thing to do and not something we would like to see, but transparency is our view of the way to go.

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I often examined the applicability of customer centricity notions (i.e., satisfaction, loyalty, relationships, engagement, CX, etc.) in various eclectic domains, e.g., “healthy relationships” (healthcare), “philanthropic relationships” (giving), “sustainable relationships” (ecology), etc. One domain that I’ve avoided, with great trepidation, has been politics. This is partly due to the maturity of the field and all that has been written and said about the topic from applied and scientific perspectives. As a marketing columnist, I also want to avoid alienating readers who might take offense at comments made about a particular candidate or party. But let’s face it: The current presidential race is pretty darn interesting and is dominating the public discourse. 

There have been highly polarized elections in the past (I remember Johnson vs. Goldwater and McGovern vs. Nixon), but this one seems particularly contentious if not an outright Donnybrook. It virtually begs comment. So let me weigh-in with a few candidate- and party-neutral thoughts from a relationship-marketing standpoint. I am inspired by a former colleague and co-author, Bruce Corner, who noted how the brand loyalty model seemed to explain losses by such candidates as John Kerry (2004) and Michael Dukakis (1988). His premise was that in the war of emotion over reason, emotion always wins. 

It is not unusual to think of a political candidate much like a product or service that voters can decide to “buy.” While the analogy isn’t perfect, there are notable similarities. This probably explains why many advertising and marketing research agencies have a political arm. As in brand marketing, voters develop an affinity for candidates in the consideration set over a period of time based on a variety of experiences, including communications. Campaign managers hope that what emerges is a large base of loyal supporters who actually go to the polls and vote. Since campaigns in the U.S. often last many months, if not years, the strength and resilience of that voter-candidate relationship is of paramount importance.  As in the current presidential race, voters are constantly bombarded by influences that could deflect their loyalty emanating from friends and family, co-workers, debates, press interviews, editorials, endorsements and political advertising.  Looking even further down the road, if the candidate is lucky enough to win, the re-election cycle is just around the corner, raising the risk of loyalty erosion due to the politician’s actual performance in office.

Let’s examine this notion of voter loyalty a little deeper. As in brand marketing, it is not a singular behavior: buy vs. not buy, pull the lever in the voting booth or don’t. There is actually a complex of behaviors that are important to a successful campaign that reflect the strength of the voters’ attachment to the candidate. These include passing on favorable word of mouth, donating to the campaign, attending rallies and events, canvassing door-to-door, voting in the primary before the general election and posting on social media..  A better measure of voter loyalty might be the willingness to engage in multiple pro-candidate behaviors.

I’ll consider some of the factors driving voter loyalty again from a brand marketing lens. One factor often overlooked relates to “switching costs” and “switching opportunities.” Every act a voter makes in support of a candidate can be considered an investment in the relationship which adds to its stickiness. While these behavioral investments are technically a sunk cost, it doesn’t feel that way to the voter. One implication for campaign management might be to foster progressive investments in small steps (e.g., “come to our rally and at least hear what the candidate has to say”). From the standpoint of the opposition, the flip side of switching costs is to create switching opportunities that can weaken or negate voter loyalty to the competitor. Certainly the strongest switching opportunity is a viable alternative candidate, but the concept is also about paving the way and making it easy to switch.  In some circumstances, loyalty-to-the-party can be a play (e.g., “the only way we’ll win the general election is if we all unite behind Candidate X”). In other situations, it might involve Candidate X adopting positions advocated by Candidate Y to draw in Y’s support base.

While not to diminish the importance of switching costs and switching opportunities, brand marketing tells us that voter loyalty is probably best explained by the mix of emotional and rational motivation. For centuries, philosophers and psychologists have debated the role of emotion vs. reason in decision making.  One school of thought posits that humans make decisions based on emotion which they then justify with rational arguments. It does seem possible to statistically separate these two influences.  In an article co-authored with Sheree Johnson, we presented data showing that (for B-to-C products and services) the impact of emotional motivation on loyalty outweighs rational motivation by a ratio of 5:3, and that this holds true across global regions. Since this ratio seems to apply to everything from cars to banking, my guess is that it explains voter loyalty as well. As brand equity theorists such as David Aaker, Kevin Keller and others have noted, emotional motivation is reflected in feelings of trust, social approval, self-respect, and pride. It is tied to the symbolic meaning of the brand (or candidate) and the reinforcement of the person’s self-concept (especially the ideal).  In contrast, rational motivation is more about cognition and logic. In the realm of products and services, quality and value (“what I get for what I give up”) are important rational motivation concepts. Perhaps the counterpart in politics might be the voter’s sense of the candidate’s qualifications, the degree of agreement with his/her policy proposals, and a confident belief of being better-off if the candidate is elected (in terms of safety, standard of living, etc.).

Theories abound on how brands (and candidates) go about making that necessary emotional connection.  One is by reference to archetypes (think Carl Jung). In the case of an election, the notion is that voters process a candidate’s story through archetypes which are universal symbols found in stories and mythologies across cultures. They are thought to be rooted in the “collective consciousness” or reptilian brain as some might say. Essentially a method of categorization, they govern our expectations and responses. Donald Trump, for example, has been variously classified as the “outlaw” (reference his anti-establishment style, disdain for political correctness, being a Washington outsider) and as the “creator” (reference his wealth and business accomplishments). Hillary Clinton, on the other hand, is often characterized as the “Ruler” (reference the Clinton dynasty, being a member of the Washington elite) and as the “caregiver” (reference populist views on education, healthcare, the economy, etc.). While voters may share archetype associations, groups have different reactions depending on their aspirations and self-identities. Communications, including both message and media, go a long way in shaping archetype associations that can trigger positive emotions (or not). For example, John Kerry was probably seen by many as the “sage” or “scholar” which is an archetype that not everyone coveys up to.

Failure to activate emotional motivation with a large cohort of the public can doom a campaign, much like it can a brand. I have always found it rather quizzical that some candidates feel they can win mainly by making a rational appeal and directing voters to examine their detailed policy proposals buried in their websites. Does anybody really go there except journalists? This may partly explain the failure of the Jeb Bush campaign that did little to channel the anger and desire for change that other candidates have apparently tied into.

It does seem that the brand loyalty framework has utility for understanding the voter-candidate relationship. Both campaign managers and marketers can benefit from examining and taking note of what works and doesn’t work in each other’s fields.

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Want to know how the U.S. economy is doing? ; it comes out every quarter. Interested in the domestic labor market? The Bureau of Labor Statistics releases detailing employment figures. Large publicly traded companies can be tracked daily through stock indexes like the Dow Jones Industrial Average and the Standard & Poor’s 500, and in a monthly survey by the National Federation of Independent Business.

But what about companies in the middle? Firms with yearly revenues between $10 million and $1 billion, which number around 200,000 businesses, employ 40 million people and total one-third of private sector gross receipts. Until recently, there were little economic data tracking this group of businesses as a class. 

But a new index developed by Chicago-based audit, tax and consulting firm (formerly known as McGladrey) aims to measure business conditions within the middle market. Developed in partnership with , the index comprises survey data collected from a representative sample of 700 middle market executives. 

The report’s topline metric, the , is a measure of sentiment, intentions and overall business conditions determined by questions about economic expectations, gross revenues, quarterly earnings, wages, hiring and capital expenditures. The inaugural survey, released in late March, reported the number to be 116.6—which is good, according to . “One hundred is what we consider to be neutral. If it’s above 100, the economy is growing. Below 100, the economy would be contracting,” Brusuelas says. 

RSM’s index lines up with another measure of the middle market: the released by the at The Ohio State University. That survey reported in its latest version that, “At the end of 2015 … expectations have materialized, indicating that the middle market has moved from a period of accelerated growth to a steadier, more sustained rate of expansion.”

New editions of the RSM Middle Market Business Index will be released every quarter. Though the current iteration is the first time RSM has published its results, Brusuelas’s team has been collecting data for the past five quarters. There are 20 questions total in the survey. Half of the questions are designed to be static; they will be asked in every iteration of the report. The other 10 questions will change every quarter in order to capture middle market reaction to specific events. For instance, Brusuelas plans to include questions about the U.S. presidential election in a later survey this year. “That one will have questions about policy uncertainty and expectations about the upcoming change in administrations,” he says. 

While the high-level economic data in the GDP and stock market reports is relevant to middle market firms, it can incorporate variables that do not apply to the middle market, resulting in an inaccurate reflection of how the middle market is performing relative to the overall economy. This can be seen in a previous version of this survey, when 

RSN asked questions about the appreciation of the U.S. dollar.

“Many middle market firms simply don’t have the exposure to the global economy, or the external economy, that the largest 530 firms that populate the S&P 500 and the Dow Jones industrial averages have. Because the global economy has slowed noticeably, and due to competitiveness issues, many of those firms’ earnings are having problems,” Brusuelas says. “Our firms, which are largely only participating in the U.S. or North American economy, they’re just not seeing those problems. They’re actually outperforming, in some cases, much larger firms.” 

Middle markets firms’ reliance on the domestic economy makes them an ideal bellwether for changes in the business cycle. The top-level takeaway ballyhooed by the inaugural index suggests the economy is unlikely to head into a recession this year. This assertion is based on survey data that indicates three in five respondents expect gross revenues to increase over the next six months, and the appetite for capital expenditures is projected to remain constant.

“One of the leading indicators [of recession] is a sharp drop in Capex. The fact that we didn’t see that, and [that] there are plans for expansion, put to rest any fears of a premature end to the business cycle,” Brusuelas says. “The U.S. economy is not a great, big aircraft carrier that turns very slowly. When the economy goes into a recession, it tends to fall off a cliff.”

Brusuelas is particularly encouraged by the current data because it was collected when high volatility in the stock market fueled fears of an imminent financial downturn. “When we were asking those questions in January and February, that was the most intense portion of global asset volatility, and we thought it would be a real acid test,” he says.

Looking ahead, Brusuelas says he expects the next survey to show improvement in hiring and other economic indicators, most notably a rebound in manufacturing activity. Drawing on five quarters of survey data, he’s comfortable reaching some conclusions about where the economy seems to be headed for middle marketers in the short term.

“Our survey participants tend to expect to see improved revenues, improved earnings and modest economic growth. They expect to increase hiring but they’re trying to keep a lid on compensation, which may be a function of overall regulatory pressures and concerns about hiring and retaining technically skilled individuals. This is a function of a tightening labor market,” he says.

Brusuelas sees the survey as a useful tool to influence the decisions of other middle market executives, as well as investors and policymakers. “If you see things getting very hot and [the RSM Middle Market Business Index] number accelerates well above 120 or 130, … and let’s say you’re a central banker, that’s probably a good forward look that one should expect inflation to heat up.”

Not everybody is convinced of the index’s value, however. , founder of middle market industry news site questions whether the data is substantive enough to base decisions around.

“When you consider [that] middle market businesses are the primary customer for [RSM’s] audit services, it makes us all wonder whether this is just marketing window dressing,” Sweeney says. “I’m pretty biased when it comes to the accounting houses. I’m of the opinion they often have ‘Grade A’ accountants and â€˜Grade C’ marketers.”

Sweeney adds, “The question that needs to be asked is whether a middle market business owner would find these numbers useful, or would they more likely desire data specific to their industry rather than their weight class of company. It varies.”

One policymaker who does find the index helpful is , co-chair of the Congressional Caucus for Middle Market Growth. In an e-mailed statement, Rep. Stivers said, “RSM’s index further demonstrates the significance of the middle market to our overall economy and future job growth. Our caucus will keep working to tell the story of the middle market and to support policies and legislation that strengthen it.”

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Breaking into an international market is difficult. Aric Saulka, manager of North American client development at , a strategic market research firm, says his clients have learned this the hard way time and again.

“I could tell you from experience that a lot of the organizations we’ve worked with are very used to working inside the U.S.,” he says. “A lot of times, they will come to us and say ‘We were thinking about international expansion.’ We start to work with them, they start to dive into our systems and they’re just [baffled].”

Many companies don’t realize just how intricate breaking into an international market can be. Saulka says certain organizations are “spoiled” from years of access to U.S. data, as no other country in the world is set up with a network of information quite like the U.S. To make a move into a new market, it is imperative to have good statistics, information and access to creativity.

While this may scare some companies away from moving into an international market, staying put may not be a viable, long-term option.  found that the world’s population in “middle income” grew from 7% in 2001 to 13% in 2011, thanks to growth in consumer markets, including China, South America and Eastern Europe. Additionally, those classified as “poor” across the world dropped from 29% to 15% during the same time period. 

Roughly  Organizations can make the move into international markets a bit easier by working with a market research company, which can offer unique reports, insights, research and knowledge to help properly focus organizational efforts toward going international, experts say. 

Jen Werner, vice president of marketing at Mintel, says working with a market research company with an international presence is “one of the most important things for a company looking to expand internationally.” 

Here are five ways a market research company can help a business looking to go international:​

1. Find the Best Fit. 

As much as a company pictures its product being successful in a certain part of the world, finding the right market—and staying objective—is imperative. Saulka says this research can be based on demographics, whether the country’s economy is growing or shrinking, a market’s digital marketing capabilities, marketing infrastructure and average consumer expenditure, among other measurements. 

“I run a scenario across 30 countries, and I can then map out [the highest rated countries for a given campaign],” he says. “You can use a complex understanding of many different social-economic indicators. It can be whatever is going to fit within the marketing campaign that you’re trying to run against.”

SEE ALSO:Relationship Value: Drivers and Outcomes in International Marketing Channels

Saulka used a soft-drink company as an example. To move from the U.S. to a European market, he says market research would look at the sales of soft drinks and carbonated beverages in that region, find a fitting demographic and find other indicators that would reveal a “perfect scenario” company to figure out whether it is worth the time and money to invest in a particular market.  

2. Know the Market From Multiple Perspectives. 

Entering an unfamiliar environment—in this case a new country or region of the world—means being a stranger in a strange land. To prevent any needless setbacks, Werner says marketing research should be used to help understand the new market from multiple perspectives. 

Getting multiple views of a market can be as simple as doing a  with an understanding of where the company, as well as its brands and products, may fit to help show what needs it could fill. 

From an unknown perspective, a market research company could help the company understand the country or region’s norms and trends on a deeper level. Additionally, there could be custom reports created to unveil other blind spots that may exist between the company’s products and local needs or desires.

3. Understand Language and Cultural Nuances. 

Understanding the market and its economics is important, but having a grasp on the cultural norms, language and nuances within the culture is essential, Saulka says.

“These are basic things you need to understand. Understanding the landscape before you market a message is crucial,” he says. “It’s why global companies have offices on the ground: … to inform how they position a campaign.”

Werner gives an example of a simple mistake in Canada. Mintel wrongly assumed that grocery shoppers in Canada, like those in the U.S., were  to shop for more fresh foods. They quickly learned that there is actually a movement in Canada to shop more in the center aisles where cheaper food is located due, at least in part, to Canada’s dollar weakness. And this was between two neighboring countries that Werner notes are often considered “the same.” 

“Brands [and] companies entering a new market may think they are being culturally sensitive or aware of how consumers may view their products, but you really can’t beat hearing it straight from the consumer’s mouth,” she says. 

Saulka says Wal-Mart’s cultural switch upon entering China, in which it changed its all-blue color scheme to incorporate red, a color symbolizing fortune and joy to Chinese citizens. On the other hand, the “Got Milk” campaign received a rude awakening in Mexico when the campaign slogan’s translation turned out to be  

4. Look for Technological Signs of Life. 

Identifying the “technodoption” of given markets may be one of the best moves a company can make when expanding internationally, according to Saulka. 

This has been a point of concentration for some of his biggest clients, Saulka says, as it will often allow companies to market to an entirely new audience without erecting a bricks-and-mortar shop.

SEE ALSO:The Role of Capabilities in International Marketing

Looking at demographic data, such as how many consumers have cellphones or internet access, can help a company figure out what kind of infrastructure is in place for a digital marketing campaign. 

“You can pinpoint your consumer and the demographic of the consumers,” he says, adding that digital campaigns have been especially effective for travel companies in terms of return on investment. “You have information on if [consumers have] traveled to your city before or are more likely to travel to your city. There’s a lot of data behind the results.”

5. If There’s No Digital Option, Go Analog. 

Not every market is equipped to receive a digital marketing campaign. While many consumers across the world have access to the internet, there are still many emerging markets where a company could thrive that are, for all intents and purposes, digital dead zones.

For more “analog” cultures, companies should go back to surveys and focus groups. Werner says focus groups can help brands gain a better understanding of consumer habits, lifestyles, shopping patterns and attitudes. 

“The advantage of focus groups is that the brand can actually be present and get a firsthand feel for how consumers actually think and behave,” she says.

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