The marketing strategy of Microsoft. How Satya Nadella transformed the company through marketing?
Microsoft is a leading technology brand with a global presence and a large customer base. The company has remained at the helm of the IT industry for several years. Its Windows operating system and Microsoft Office productivity suite are household names in the IT circles and now it is also a leading provider of cloud-based services. Microsoft is also among the leading competitors of Apple.
The two giants are engaged in a rather intense battle for market share in the computing industry. Both are also facing tough competition due to the emergence of new players in the IT industry. However, while on the one hand, Microsoft is an innovative company with an excellent track record in the area of technological innovation, in terms of marketing it has followed the same line for too long.
Microsoft is a strong brand but at several points in its history, it failed to make good of various important opportunities. This led to competition growing intense in several areas. Things have changed in recent years and the company revamped its marketing strategy to include new things and be more modern in its approach. Its focus is on customer experience now and the recent changes have affected both its market position and brand image. The improved bottom line also proved that these changes have successfully brought results and Microsoft has emerged from the gap it remained caught in for years. However, it also took the organization some time to realize the need for a fresh and modern approach to marketing.
Satya Nadella has played a critical role in this entire transformation. He took charge of the organization at a very critical point when the company badly needed to shift its course. Right before the appointment of Satya Nadella as the new CEO of the company, the CFO of Microsoft Chris Capossela had announced that if Microsoft did not successfully transform its marketing strategy, the brand could fail. In the case of large technology organizations, while technological innovation is critical for growth, market share and competitive advantage, successful marketing is even critical without which your business strategy can be unsuccessful.
Marketing does not just churn demand or drive sales. It also guides your business strategy and defines who you are. Technology businesses that fail to focus upon this area may find themselves in a mess later. It is why big businesses make marketing a central part of the business strategy. While Microsoft is a well-known brand, it too needed a modern and clearly defined marketing strategy that could guide its business strategy in the near future.
This had become all the more essential due to the fact that the technology environment was growing even more complex day by day and with the emergence of players like Amazon and Alphabet both the level of competition and the need to connect with the customers had grown. With these changes in the technology industry, it was now impossible for Microsoft to follow the old line and still retain its success. The technology environment is changing every day. Every rival brand of Microsoft is investing Billions in technological innovation and better customer experience.
Moreover, Microsoft had seen enough success in its history with its old marketing strategy and that’s what made it difficult to make everyone recognize the need for change. Capossela realized that the old marketing strategy was also making Microsoft lose connection with the millennial generation, the most important market segment of Microsoft Inc. This was a bitter problem and unless the connection was made stronger, worse problems could be looming on the horizon. There were several factors in light of which swift change was essential.
- The changing technology environment offered an opportunity for change.
- Mobile and cloud technologies were gaining popularity which offered opportunities to Microsoft and also posed a bitter threat in case the organization failed to change.
- New competition had appeared and grown stronger in the market.
- New customers and customer segments had become reachable with the proliferation of internet technology and the growth of cloud-based services.
- A new range of services had appeared.
- A new business model was the need of time.
Having recognized these trends, Microsoft had become aware that its early methods had grown outdated and would no longer yield expected results. Apart from having a new strategy, it was important for the company to focus on how it branded itself. A major change was underway at Microsoft because these changes were going to decide its fate in the next five years. It was important to reimagine the brand’s identity or to remain ready for the inevitable. If Microsoft could only successfully transform its identity, it was going to bring its customers closer and turn them into brand evangelists.
All that Microsoft had done previously in the area of marketing was insufficient in the new environment. The company was facing a tough question – to define clearly what it stood for. Apple was a cool brand; Google stood for search, and Facebook was for sharing. What was Microsoft about? The choice everyone settled upon was empowerment. Microsoft revised its mission to reflect its new identity and new course. The new mission was to empower every person and organization on the planet to achieve more. Next was the question of the brand’s identity as a partner. To define your brand properly, you should first consider a few things like:
- What does your audience want from your product or service?
- What your brand stands for?
- What is different and unique about your brand?
- Why would the customer care for your brand?
To answer these questions, Microsoft had to consider the user experience as well as empower its customers and partners through its marketing channels. In the past two years, Microsoft has simplified the structure of its marketing function and made it more outcome-focused, relevant to all partners and scalable. Instead of just offering computing solutions and software, Microsoft now offers solutions that make life easier for its audience.
Now, was the time to address the weaknesses. Charles Eichenbaum, (Director of Marketing Technology at Microsoft divided the existing marketing activities into four areas to make it easier to decide which areas initially required focusing upon. Microsoft had built a strong reputation; now it needed to build stronger trust and recognition. Sales enablement and marketing intelligence were performing well. Marketing intelligence was delivering great value and excellent business foresight.
However, demand creation was still underperforming. So, what came out from this analysis was that they had been celebrating marketing success but without measuring KPIs properly. Analysis, therefore, had to become a central part of marketing. It was going to be the cornerstone of the future marketing strategies of Microsoft and this is how the transition to modern marketing took off.
There are several key ideas behind the modern marketing strategy of Microsoft.
- More personalized content and marketing experiences.
- Role of company culture in marketing.
- More aligned and connected sales and marketing expenses.
- Storytelling educational content focused upon specific verticals and industries.
- Track and analyze the entire purchase journey to improve marketing ROI.
- Establish stronger and lasting relationships with customers.
The fresh changes led to higher ROI, improved targeting and retargeting as well as higher user engagement. Microsoft used more educational content to connect with its audience and specific customer segments. Blog posts, educational infographics, fresh and relevant research and more such content aimed at improving customer awareness were used to strengthen the customer connection and engage the target audience. Results were great and obvious because a significant percentage (above 7%) of the audience that watched its webinars could be turned into paying customers. Digital marketing has made it easier to reach new customer groups and launch marketing campaigns. Microsoft is using digital technology to engage and encourage customers to ready themselves for a fast-changing technology and market environment. Analysis brought new data and insights which Microsoft could now use to launch even great marketing campaigns.
Pratap, Abhijeet. “MARKETING TRANSFORMATION AT MICROSOFT.” Cheshnotes, Mar. 2019, cheshnotes.com/2019/03/marketing-transformation-at-microsoft/.
Pratap, A. (2019, March). MARKETING TRANSFORMATION AT MICROSOFT. In Cheshnotes. Retrieved from https://cheshnotes.com/marketing-transformation-at-microsoft/