Perhaps no metaphor is more common in business than the equation of marketing with war. Marketers speak incessantly of “conquests.” Their corporate colleagues are members of a sales “force,” working in “territories.” Together, they launch “campaigns,” using “flights” or “volleys” of advertising, in an attempt to “win” share.
It’s unsurprising, then, that today, many sales and marketing executives feel they are engaged in — and losing — a two-front war.
On one side, they face increasingly demanding consumers: “I want it in this color, in this configuration, at this price, and if you can’t deliver tomorrow, I’ll source it over the Web from any dealer who can within a 600-mile radius.”
Meanwhile, the cry from above is equally strident.
CEOs and shareholders want “more bang for their marketing buck”; “more market share for less advertising spend”; “more new-product hits with less investment in new product development.” The message from consumers and CEOs is strikingly similar: “We want more value for our money.”
This loud and insistent mantra puts sales and marketing departments in a bind. How can they generate profitable top-line growth in mature, often flat, markets that are experiencing severe price pressures? And, at a time when the CEO’s agenda is to improve return on investment by simultaneously increasing returns and conserving investment, how can they deliver near-term results without sacrificing long-term brand equity?
It’s a conundrum that marketers everywhere face. How can they square this uncomfortable circle? The answer may not be to everyone’s liking: There is no magic bullet; rather, hard work is required. And that work can be put off no longer. ROI marketing — the application of sophisticated measurement techniques in the service of optimizing marketing spending — is now no longer just a nice idea, but an imperative for corporate survival. As one chief marketing officer told us: “Marketing is dead if it’s not building the business.”
The world has changed, and marketing must change too. Marketing needs to become, in a word, rigorous — or risk the onset of rigor mortis.
That change is coming, and it is already having a profound impact on how businesspeople think about marketing. It is eliminating marketing activities that are costly and inefficient. It is empowering employees with information, tools, and responsibility and, in turn, holding them accountable for their decisions. It is leading to a new marketing culture in which decisions are based on rigorous analysis and testing rather than gut feel and guesswork. Most of all, it is ensuring that marketing spend is a fact-based investment yielding high returns instead of a potentially money-losing exercise in creative wishful thinking.
This article is adapted from Results-Driven Marketing: A Guide to Growth and Profits, a strategy+business Reader published in fall 2005 (click here for more about the book and how to purchase it). A collection of articles from strategy+business and by the senior marketing and sales experts at Booz Allen Hamilton, the global strategy and technology consulting firm, the book is a guide to this transformation. If we were to continue the military metaphor, we might call it a battle plan. But marketing is not warfare. Rather, it is a discipline. So please consider Results-Driven Marketing: A Guide to Growth and Profits an exercise manual, a handbook for healthful marketing.
Marketing’s Fifth Discipline
There used to be Four Ps of marketing: product, price, place, and promotion. This simple aide-mémoire provided a touchstone for marketers everywhere, a clear summary of the first principles. In a maelstrom of change, marketers could rest assured that the basics remained untouched.
Those days have gone. It’s not that the Four Ps are in themselves wrong, or even that they have been superseded by a “new and improved” formula that cleans up markets quicker and whiter. It is simply that they fail to put enough attention on the most important P in business — profitability. For “profitability” read “return on investment” — the fifth marketing discipline.