Sunday, April 27, 2008
ACCOUNTABLE FOR RESULTS
Over the years we’ve been privileged to work with many fine companies and people – some among the best in the world. We are grateful for the trust these people and their organizations have in us at BDNI to help train their managers and build their brands. But not everything is rosy.
Over these same years we’ve witnessed erosion in the confidence of marketing by senior executives throughout the business world (perhaps, with exception, in emerging economies who are discovering the power of marketing). This erosion traces to the feeling among these senior managers that they are unable to determine the value they receive from marketing.
In a Marketing Accountability Survey conducted among 135 senior marketers/ANA (Association of National Advertisers) members conducted by Marketing Management Analytics reveals that the vast majority of these senior marketers (60%) claim that defining, measuring and taking action on ROI is important. Yet only 20% of these same senior marketing managers are satisfied with their ability to do so. Even more alarming nearly three-quarters (73%) of senior level marketers (not sales, manufacturing or finance managers but senior level marketers!) declare that they lack confidence in understanding the impact of marketing on sales.
What? Can this possibly be right?
It’s not just talk. The attitudes of these senior managers revealed in the survey is rather evident in their behavior too – specifically, the role they relegate to marketing in their organizations. It certainly isn’t a strategic role. Instead it’s project based. Marketers in these companies aren’t “brand” managers but more like “project” managers. And, in many companies (particularly in pharmaceuticals and medical devices) the projects are about supporting the sales force as opposed to developing an enduring relationship for the brand with its customers.
Another piece of evidence is the way senior managers handle marketing funding. When sales are soft the practice, not the exception, is to cut marketing budgets. Media is one of the first to be slashed. Marketing research is postponed for another year. Test markets are aborted. But we don’t have to tell you. You experience this annually. The question isn’t why do these senior managers do this but why not? Afterall, neither they nor their marketers really know what return they are receiving from their marketing support. As noted above, whatever it is that they get from marketing they don’t believe it has an impact on sales. If it did, they wouldn’t cut marketing funding since it would lead to a further erosion of sales.
This is most disheartening to those of us who clearly understand the role that marketing can and does play in growing sales and building meaningful relationships with customers. We heartily believe that the role of marketing is to create brand loyalty. CreateBrand connotes a special relationship with these customers to encourage preference for your offering. Loyalty is about establishing unswerving customer devotion to your brand to immunize it from competitive inroads, new entries into the marketplace, price discounting, new competitive features, etc. means to bring a customer into existence (i.e., make a sale).
When senior managers assert that marketing doesn’t work we’re bold enough to correct them. We tell them “YOUR marketing or advertising or promotion or ‘whatever’ marketing doesn’t work.” There’s ample evidence that marketing does work. Consider the success of the iPod. “Oh, but that’s product” may be their response. Well, many techno geeks believe the iPod is not the best of the MP3 players. But it is one of the more than 10,000 labels being marketed that we not only know but the vast majority choose as well. That’s marketing. Consider the success of the MasterCard “priceless” advertising campaign. The product didn’t change nor did the credit terms or the way the cards works. It was the marketing. How about Starbucks? They may be currently experiencing a softening of sales in North America but that may very well be attributed to an economy that is slowing under the weight of >$100 barrel oil, a credit squeeze and the inexorable improvement from a plethora of competitors. But remember that this is a company that introduced premium priced coffee products that have names many consumers couldn’t pronounce (without a Starbucks’ dictionary) to become the dominant player in the market. Starbucks is 25-times larger than its closest competitor, the Minnesota-based Caribou Coffee. More than 40-million consumers shop Starbucks each week. Now that’s marketing.
Senior managers need to appreciate that marketing can fulfill this critically essential role of creating brand loyalty if they are to build companies and brands that last. But the onus is on us. We marketers need to produce incontrovertible results if senior managers and our organizations are ever to recognize the critical role that marketing can and should play.
BOATS & HELICOPTERS:
- Think strategically - In this “age of sameness,” where products and services are basically the same, “how” we think could prove to be the critical difference in gaining and sustaining a competitive advantage. Nearly all of our businesses are strapped for resources. We need to make choices, wise choices, which will enhance the productivity of our limited resources – “time” and “talent” included. Nowhere is this more important than in the development of the brand positioning strategy to create a perception in the marketplace that drives preference for our offering versus the competition. But it also includes the marketing mix elements we choose and the tactics we create. All of our plans and actions need to be directed at, and tied to, realizing a specific behavior from a carefully selected market segment.
- Put the focus on results not on projects – The objective isn’t to develop a sales aid but one the sales force can and will use in generating incremental sales. The objective isn’t to launch a new advertising campaign but to create a campaign that achieves predetermined behavior objectives that lead to growing sales. The objective isn’t to develop new packaging or be present at an important medical congress but to connect with customers in such a way as to stimulate penetration, switching, etc., among target prospects and strengthen the bond with current customers. Let’s put the focus on where it belongs, getting results!
- Measure performance – Without measurement we will never know or appreciate the impact marketing, any of our marketing mix elements or tactics have on generating sales and creating brand loyalty. This should not be confused with the analytics of surveys and marketing research (such as copy testing). They have their place. However, they are merely indicators and not always accurate in predicting marketplace results. (For example the incredibly successful MasterCard advertising campaign, which has built the brand throughout the world for more than 10-years now to overtake Visa, fared poorly in ad testing.) We need to analyze impact in the marketplace. We must learn what works and what doesn’t. If we don’t have the measurements then we really don’t know. All we have is conjecture and it’s not enough to provide confidence to senior managers or prevent our funding from being cut.
- Learn and adapt – Even if your company isn’t a learning organization (of which the vast majority are not) at the very least manage your brand so it is one. Measure performance to determine what works and what doesn’t work. Importantly, learn “why” something you expected to work did or didn’t. Ensure that your marketing plans include adaptive experiments in the marketplace of alternate media mix elements and tactics. Measure the results against “no effort” control markets and markets receiving proven marketing tactics to determine not just absolute but relative performance. Dialogue with customers to discover the “why” behind the “what” of performance. Adapt your marketing plans and tactics to reflect your learnings and achieve the results you need.
- Think incremental – This is about making marketing more productive in increasing output beyond what is expected as defined by the sales forecast for the month, quarter and/or year. It is about exceeding expectations. It is about achieving stretch objectives. It is really the mindset that is essential to realizing and sustaining “marketing excellence.” It is the quest to get more out of every dollar and every action. So don’t settle for what is expected. Think, think, think about what it would take to set new records for performance as measured in the marketplace!
- Embrace accountability – Take the leadership in holding yourself accountable for the impact of your marketing on impacting sales and brand health. Prove to yourself and your management what marketing and you can do for the organization. Talk results. Generate results. Show results. Prove results.
Enhance your competencies – Good intentions are not enough. They need to be supported by action. A critical action element is the development of core competencies. Professionals relentlessly pursue personal AND team development. Tiger Woods is arguably the best golfer of all times. Yet he has a coach to assist him in enhancing his skills. Professional teams such as this year’s Super Bowl champs, the New York Giants, consistently work with their cadre of coaches to build individual and team competencies. It’s not just about practice but skill acquisition and development. Doing the same things in the same way is not the path to development and, eventual, mastery. It requires thoughtful reflection and analysis. It’s about: identifying essential competencies, not just in the absolute but relative to competition; identifying gaps between actual and desired competencies; developing a plan to achieve needed competencies; and institutionalizing the practices, tools and discipline that will empower the marketer and organization to realize success. (Do you know what competencies are essential for success? Check our website for a listing of core competencies and BDNI Institute programs that will assist you in personal and organizational development.)
Richard Czerniawski & Mike Maloney
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