by
Bill Bellows
3Point
Communications
In 2004, Nirmalya
Kumar of the London Business School, published an incredibly
insightful book called Marketing as Strategy.
Professor
Kumar argued that CEOs have lost faith in marketing -- that somewhere
marketing became marginalized by tactical implementation of communications
programs rather than owning a strategic "seat at the
table."
Yet,
as Kumar states, the importance of marketing as a two-way mirror between
organizations and their customers has never been more important.
So
we have this odd situation where the importance of the function is growing
while the faith of management in those who lead the function is
diminished. How did we get to this place where the marketing function
is in crisis? How has marketing lost its relevance?
The
answer lies, in part, with the subtitle of Professor Kumar's book:
"understanding the CEO's agenda for driving growth and
innovation."
Over
the years, many marketing organizations and the marketers who run them and
serve them have become disconnected from the strategy of the company. My
experience is that they often are communications experts not marketing
experts.
Like
any function under constant pressure, marketing developed its own measures
to justify its existence. Today, that takes place in the form of
reliance on communications tactics and a train wreck of metrics, strewn
like jackknifed cars along the track.
We,
as marketers get caught up in the latest pretty packaging whether it is
social media, SEO or web traffic, and we look for metrics to justify how
well they work. (How many followers do you have?)
I
find it interesting how many times I've read leading social media experts
stress the importance of understanding the company's business objectives. I want to stand up, shaking with incredulity, like the comedian
Lewis Black. "THAT IS THE PROBLEM!" What
are the business objectives? Who in marketing helps set them? Who in
marketing understands them?
Don't
misunderstand me. Metrics are helpful. They are wonderful tools. But they
are usually the cart before the proverbial horse. They often are not lead
indicators of where the CEO is trying to move the company. CEOs are under
increasing pressure to deliver profits. Board members worry about the
complexities of financial reporting requirements.
And,
so, the C-suite agenda is less likely to focus on marketing issues. But
marketing still has to find and deliver answers to questions that
ultimately drive the growth of the company -- who are our customers?
what do they need from us? how do we deliver what they need
better than our competition delivers it?
What
has to change for marketing to become relevant to CEOs -- and for CMOs to
keep their "seat in the suite"?
Let's start by throwing stuff out. The 4Ps
-- product, promotion, price and place? In the dumpster! Let's start
to think and act like strategic business executives not kids playing with
the latest toy and trying to show mom and dad how well it works.
THE THREE CORE QUESTIONS CEO's FACE
Here's an easy
place to start. Answer the following three questions for your
company or organization:
1.
Where are we?
2.
Where have we agreed to go in five years?
3.
How do we get there profitably and increase shareholder value?
In
one form or another that is what every CEO is trying to determine.
Twitter, Facebook, Digg, Reddit, Radian 6, only matter if they help answer
item 3, and I believe they can -- when applied correctly to the right
problem.
So
if that is the CEO's short list, what should marketing's be? Let's go back
to Professor Kumar. Here is the set of questions he poses that every
marketer needs to become relevant to the CEO and his or her agenda. You
need to answer these. If you don't know the answers, ask somebody. If
nobody knows, figure out how to use the tools of marketing to get answers.
That is how you become relevant.
SEVEN
STEPS TO MAKE MARKETING RELEVANT AGAIN
1.
From Market Segments to Strategic Segments:
- Who
are our valued customers?
- Which
customers are unhappy with current offerings in the industry?
- Is
the target large enough to meet our sales objectives?
- What
is our value proposition?
- Does
it fit the needs of customers we are trying to serve?
- What
benefits are we delivering?
- Can
we deliver and earn a profit?
2.
From Selling Products to Providing Solutions:
- Do
we guarantee customers outcomes and benefits instead of product
performance?
- Have
our sales people developed consulting skills and deep industry
knowledge?
- Have
we developed effective processes to allocate resources to solution
projects?
3.
From Declining to Growing Distribution Channels:
- What
service outputs will the new channel provide?
- How
will the relative importance and power of existing channels change?
- Which
competitors will enter the new channel?
- What
changes in channel incentives to existing members will competitors
try?
- What
new competences do we need to enter the new channel?
4.
From Branded Bulldozers to Global Distribution Partners:
- Have
we identified our most valuable clients on a worldwide basis?
- Are
there single points of contact for global customers?
- Have
we optimized our supply chain for global efficiency
- Have
we harmonized pricing structures?
5.
From Brand Acquisitions to Brand Rationalization:
- Which
brands are contributing to our profits?
- What
needs-based segments exist in each category?
- How
much sales revenue would we risk by deleting non-core brands?
- What
is the role of the corporate brand?
- How
will we articulate our program to stakeholders?
6.
From Market-Driven to Market-Driving:
- Are
new ideas routinely imported from the outside?
- Do
we tolerate failures and have processes in place to learn from
failures?
- Do
we ensure that radical ideas do not lose resources to incremental
ideas?
7.
From Strategic Business Unit Marketing to Corporate Marketing:
- How
does the organization rate on customer focus in processes, including
new product development, order fulfillment, customer relationship
management?
- Is
the organization organized around customers?
- Are
metrics and rewards related to impact on customers?
- Does
the organization systematically learn about customers?
Clearly
this is as much a shift in thinking as it is in the tools and programs
marketing deploys. Social media and digital marketing tied to analytics
can move the needle forward only a fraction if marketers don't understand
the three most difficult questions any company faces.
As
marketers, isn't it time we stepped back and started thinking about the
metrics we use as vehicles to identify the growth needs of the company
rather than metrics that justify the existence of tactics that are often
not well aligned with the strategic direction of the company?
Isn't
it time we started to help set the strategic agenda of our companies and
clients rather than serve as marginalized order takers worried about
followers and colorful charts?
Bill
Bellows is a partner at 3Point
Communications, a global communications consulting firm specializing
is creating content-centered public relations campaigns for technology
brands.
Email: bbellows@3pointcommunications.com
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