It’s time advertisers put on our marketing hats for good
Published on 08/04/2003 under Accountability
I attended a conference of business marketing communications professionals recently and, much to my surprise and delight, the agenda was dominated by strategic marketing issues instead of the usual advertising and marketing communications how-to stuff. Talk about long overdue.
Maybe there’s hope for us after all. I mean, I sat in a room full of ad managers and agency types, and this guy named Bob Prosen, the founder, president and CEO of Sustained Profitability Systems in Dallas, talked about ways to increase the value of marketing.
And didn’t go over attendees’ heads either. No, I’d say they lapped it up. Prosen threw out issues like the importance of positive net cash flow, net present value and internal rate of return, and these ad guys called for more. Bring it on, Bob, baby--give us all you got.
For the second time in the past 12 months, I was hearing a conference speaker say the CFO is one of the two most important friends to have in a company. According to Prosen, the other one is the vice president of sales because you can “draft” behind him. What this means is the sales vice president will demand quality marketing communications support to achieve his sales quotas. Just make sure you’re on the same page with that guy.
Another speaker, Stan Martin, CEO of Adroit Consulting Inc. in Deerfield, Ill., urged us to take ownership of CRM to ensure a tangible ROI. Holy spreadsheet, Batman! You mean, we’re allowed to know who our 10 most profitable customers are according to lifetime value? Oh, we’re expected to know that. Yikes.
Martin also made a significant observation about the importance of customer service department staffers to a company’s brand image. In many ways, they are your brand image.
Mark Peck, president of Apexx Marketing Group in West Allis, Wis., advanced the somewhat startling concept of a new agency model, one able to provide such services as channel assessment and research, buying behavior analysis, CRM metrics and strategy, customer contact strategy, product branding and business and venture capital planning. What about making ads? They’re important too, you know.
Peck also said, in almost all businesses, the average customer is not relevant to the success of the business because 20% of customers generate 80% of the revenues. So much for all those target audience statements we’ve labored over.
In his discussion of lifetime customer value, Peck said the more you can reduce the time between the first and second purchase, the higher the lifetime value of the customer. Don’t ask me to explain more, I was writing as fast as I could.
Another speaker, Greg DiCillo, president and co-founder of Life Cycle Strategies, based in Cleveland, explored ways to leverage market knowledge for greater marketing success. He asked how many product managers were in the audience, and when no hands were raised, you could see beads of sweat form on his upper lip.
It was probably more fun for us to hear his “14 mistakes product managers make” list than if we actually were product managers. He did, however, make some key points about the dangers of being customer-driven instead of market-focused, and failing to provide an adequate framework for planning and market development.
Maureen McGuire, vice president of worldwide marketing management and integrated marketing communications for Armonk, N.Y.-based IBM, told how the company has transformed itself from maker of computer hardware to provider of computer-based solutions. Big change. And advertising played a huge role in this transformation. McGuire used TV spots since the formation of IBM’s e-business group in 1997 to show, step by step, how the change was accomplished.
Impressive.
Not everyone spoke about marketing, of course. Chip Shafer, principal, and Rick Sharga, brand consultant, for Trajectories Group in Aliso Viejo, Calif., presented a formula you can use to determine a value for your corporate brand. Something like reputation + momentum + vision x connection = brand. Just what I need—more math.
But seriously, Shafer and Sharga pointed out that shareholder’s equity amounts to less than a third of total market capitalization for Fortune 500 companies. The rest is intangible assets--things like patents, customer lists and brands. The secret to being a highly valued company, they say, is to increase the value of intangibles. It’s the company’s most highly leverageable opportunity—which sounds like marketing again. And I guess it is.
In the final analysis, everyone at this advertising conference was talking about marketing strategy, and all I can say is “hallelujah.” It’s high time we quit acting like ad-making, brochure-producing, tradeshow-booth-designing Web site gurus and started talking marketing strategy with the big boys.
If you want to be an all-star player, you need to start addressing the all-star issues, like profitability, market share and return on investment. In the food chain of business, the big fish are all over these issues. Brochure production is for the bottom-feeders.
I’m not saying that advertising isn’t important, but too many people have made advertising a tactical, implementational function. It’s become a how-to exercise after somebody else has determined the “what” and “why.”
We need to raise our sights above inquiry generation and awareness levels. We even need to think about bigger issues than brand management and integrated marketing. We need to take off the blinders and start worrying about the essential business purpose for our company or our client companies. Are we selling drill bits or the ability to make holes? Microprocessors or the ability to process data? Secondary mortgage funding or the Great American Dream?
These are not issues for someone else to decide. As marketing communications professionals, it’s our job to help recognize market opportunities and capitalize on them. It’s time we put on our marketing hats, and kept them on for the duration.