Marketing’s Respect Problem and How to Solve It sent a great article out last week via newsletter by Kevin Hillstrom, titled, Are Marketers Underappreciated? You can read it by following the link.  In it and the article he references, the issue of marketing’s role in an organization comes into question and what value marketing brings and why it is not valued as much as most marketers feel it should be.  These articles and comments posted about them raise a lot of great points about what is wrong with marketing and why it really is part of its own problem.  The solution is already out there, marketing needs to adapt to the changing times and upgrade what it means to be a marketer with new tools and methods.  But first, we need to look at how this was created.

Most people in marketing come in via two ways, they stumble in or they went to school and learned it.  Those that stumble in do so in usually the creative areas, such as graphic artist who end up in ad agencies or writers who find they are great at ad copy.  This is really the advertising side of market, it is NOT marketing, but merely a piece of it.  Often this gets confused as marketing in its whole.  There was a time, way back in the 50’s, when it was pretty much marketing, but as times changes, so did marketing and it is merely one aspect of marketing.  I was at a company a few weeks ago that thought, logos and nice looking brochures were marketing and that’s it.  It was a hard sell because a lot of upfront education had to take place, basically showing them that 60’s of growth has taken place and new methods and techniques are available.  This kind of marketing suffers a lot from a lack of self analysis.  They can show you an ad and it may look good and a focus group may like it, but can they tell you what the bottom line impact is?  Often times, no, this hurts marketing, when you can’t demonstrate what dollar value you bring to the profit performance of an organization, you are basically a luxury there until lean times hit.  Some like to joke that they know they are wasting half their marketing budget and ineffective ads, they just don’t know which half.  This isn’t funny to the CFO or the CEO trying to justify the ad spending in tight budget times.  They need to show how those ads really impact the bottom line and a lot of times, this doesn’t happen.

Next you have those who went to school and got a degree in marketing.  Often the case here is, we are taught a certain school of thought in marketing.  That school of thought is what the professors likes or what the marketing department says IS marketing, which is often defined by which types of companies recruit from the school.  Once a student leaves school and enters a given industry, they learn the marketing methods of that industry and that’s pretty much it.  If they are lucky, marketing is seen as a profit performer.  If not, they end up in an organization where marketing is there but still struggling to define its importance to the bottom line and organization as a whole.  In such organizations, marketers are jokingly referred to (sometimes not) as the people who couldn’t count well enough to work in finance and could sell anything but were good at drawing inside the lines.

In almost all cases, marketing suffers from a lack of bottom line performance.  Even in marketing driven organizations such as CPG’s.  I remember reading a case study where a cereal maker launched a new brand with zero marketing efforts.  In 6 months it had the same market share as their average brands did, the ones they spent millions on.  If I were the CEO I would be pretty annoyed and looking at my CMO asking “what’s going on,” and demanding answers.  In many other organizations, marketing is there, it’s doing something, but the CFO really isn’t sure what it is.  The business world has changed, it is more metrics driven, people want to measure everything and most marketing departments have not kept up with the times.  The days where the 4 P’s were supreme are over!  A new P is king and that P is Profitability!

The fifth P calls for a new focus on what is important in marketing and that is metrics, the ability to demonstrate what works and why it works and how you plan on using it in the future to improve profit performance.  Nice looking ads are great, but you better be able to show why that ad is going to perform and what can be expected.  This also means as a marketer, you can’t rely on templates or one size fits all.  Your metrics are your weapons against your competitors.  Customize your metrics to fit your company, this means learning to listen.  You don’t have to be an expert in that industry, actually the reverse is true (if you walk in thinking you know it all, you your competitors will out perform you), and you have to be a good problem solver.  Gone are the days of the spinmiester.  Frankly I’m not sad, I can’t stand those guys either, you know the type “give me anything, I can spin it.”  Spin doesn’t translate into long term growth, neither do nice looking ads that have little impact or can not be measured.

The cost structure of marketing in all industries is up.  This is a natural evolution that now that marketing is a large cost, in some cases 25%, it is no wonder that companies are demanding more accountability.  But where do you start?  This can be hard, I know, I’ve done it, so let me share my experience. 

I entered an organization that was suffering rather hard due to market pressures.  Marketing was a fuzzy discipline with little bottom line accountability.  They talked about brand performance, and market share, etc… but management was saying “where is this all showing up in my bottom line performance, we are losing clients!”

All marketing efforts are about ROI, connecting with customers by understanding customer’s needs and ensuring a unique place in the market that results in long term profits.  A good marketer needs to be a good listener and problem solver before all else.  Know what your management is really asking for.  Usually, they want to know why they are paying you, what are your results to them.  This is your value statement in numbers, your ROI.  Take marketing outside the marketing department, the fact is, marketing is a company wide activity, not a department.  Each contact point with customers, I measured and demonstrated the impact marketing had on each point.  There are some measuring tools that you need to be standard, for accounting purposes.  But others were customized for the unique nature of the business.  This is where you need to listen, to clients as in not just the end users, but management and the people involved at each contact point.

Next you will need to create a historical database of ideas.  Keep records of all your marketing efforts.  Have a forecasted model developed up front and then an actual.  Go back and study them and any areas that did not perform as expect, go back and analyze until you know why the actual was not as forecasted.  Then the next the CFO says “why should I pay $100,000 for this new ad?”  You can go back and demonstrate the performance impact it had in the past, the ROI and actual bottom line improvement it provided.

Understand your market and competitors.  By market, I mean the world, keep economic and industry specific information coming in and sorting it for relevance.  Keep track of competitors, there response to each change and motivations.  When you see a competitor making a move, you can point out a very good reason why you should or should not counter, based on market information. 

Team up with all other departments, find ways to measure marketing’s impact on them.  I demonstrated how the new approach to reach customers actually cut operational turn over by half.  That’s a huge cost saving just by changing the approach to marketing, the ROI was very much demonstrated and so was the bottom line impact.

The brand performance is all about understanding and connecting with customers.  I developed programs that were intended to get customer satisfaction up; it did go up, 77%, which resulted in happy customers who wanted to buy more.  I can point directly to the actions taken and how it improved the brand performance which improved the sales performance and profit performance.  Add to that, I showed that ROI was improved by reducing the cost per sales transaction via this new approach. 

The market share for the company improved so much, they went from 16th to 7th in the world, even when out spent, the market efforts still held up against deeper pocket competitors.

Business has changed, marketing needs to change with it in order to gain the place at the table it has earned.  So far, in many companies, marketing has not adjusted to the new times; they still live in the past with weak performance measures.  It is my goal to make marketing what it should be, a strong performance driver where efforts are known and deliver results.  When my actuals were off the forecast, even when better than expects, I went and analyzed the situation to understand and build on that to do better next time.  What made it perform better, how can it be duplicated?  Never just rest on good results, always question why they were better than forecasted, the need to understand is important for the new way of marketing.

Build metrics.  NEVER rest on templates alone!  Yes, some templates are needed, just like in finance and accounting, you need certain tools that are standard in all situations.  However, look at the hedge funds who out perform others; they all have their own unique set of analysis and metrics that fits for their specific needs.  Marketers need this too.  I’m not a wiz at numbers, but I understand how to develop metrics that fit the needs of management’s goals.  Part of marketing’s job is to demonstrate the value, create the metrics that do that.  For many industries, you will have to design them anyway.  Always look for new ways that work best, but stay away from the herd mentality.

In the end, marketing needs to change, our mission for a company is to help manage change to meet the changing demands of our clients.  We can’t possible do that by not changing to meet the demands of the present.  Time to change.  If you want help doing this, you can always contact me.

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