The Hindu Business Line : Transforming marketing

Marketing departments try hard to market the firm's offerings to customers, but they often do a very poor job of marketing themselves internally to the leadership team and to other departments.

Marketing has failed to live up to the exalted position that Peter Drucker gave it more than three decades ago when he declared, "The business has two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs." To claim the strategic high ground, marketing needs to reinvent itself. Here is a seven-point manifesto for chief marketing officers to transform marketing.

Point One: Market the marketing department. An Indian proverb says, "Under a bright lamp, there is great darkness." Marketing departments try hard to market the firm's offerings to customers, but they often do a very poor job of marketing themselves internally to the leadership team and to other departments. In my conversations with developers at technology companies, I have found that very few of them have a clue what marketers do at their firms.

It is the CMO's responsibility to communicate the "value proposition" of marketing to everyone in the organisation.

To do this, CMOs need to clearly define how marketing adds value to the company. They need to identify a few key, high-level marketing priorities, and they need to link these priorities to the company's growth and profitability objectives. And CMOs need to learn the languages of CEOs, CEOs and R&D.

Point Two: Change the marketing mindset. The traditional marketing mindset is a `command and control' mindset that relies on selling to passive customers whose demand and perceptions can be influenced and manipulated.

In an age of `Information Democracy,' CMOs need to evolve their organisations to a `connect and collaborate' mindset where the company collaborates with customers to create, deliver and share value. Co-creation of value with customers requires creating a shared vocabulary, shared interests, shared platforms and shared trust with customers.

Point Three: Earn credibility through customer expertise. Marketers often complain about the lack of authority and lack of influence over their colleagues in engineering, operations or finance. The simple fact is - nobody will give you a scat at the table; you have to earn it. And the best way to gain power is through knowing your customers better than anyone else in the organisation.

Customer expertise will provide marketers with the courage of conviction they need to promote their point of view to other parts of the organisation. Remember that you cannot outsource customer understanding to market research vendors. You have to get in front of customers and get inside their lives. As a Punjabi proverb states: "If you want to see heaven, you have to die yourself."

Point Four: Focus on the customer experience. Too many marketing organisations limit themselves to the products and services that they make, without realising that it is the total customer experience that matters most in differentiating yourself and delighting customers.

Focusing on the customer experience requires marketers to think holistically about every single customer touchpoint and every stage in the customer lifecycle.

It also demands a total quality approach to designing and improving the customer experience.

It is the CMO's responsibility to ensure that every employee in the firm understands how he or she impacts the customer experience. And it is the responsibility of marketing to orchestrate the customer experience across all channels, partners, business units and stages in the customer buying cycle.

Point Five: Think in process terms. Marketing has traditionally thought of its activities in terms of the infamous four Ps (product, price, promotion and place). This is a functional view of marketing activities, and it fosters the mistaken impression that marketing functions are independent silos. Instead, marketing activities should be conceptualised as a set of logically related value-creation processes.

Drawing insights from the business process reengineering literature, 1 believe that marketing needs to be organised around processes, not functions like channel marketing, audience marketing or product marketing. These value-creation processes include the processes for understanding, defining, realising, delivering, capturing, communicating and sustaining value. Each process has a set of activities and deliverables, and these processes together constitute the new work of marketers.

Point Six: Create an ROI culture. Marketing must conform to the adage, "If you can't measure it, you can't manage it. " CMOs need to promote a return-on-investment mindset that should permeate every marketing initiative.

Marketing initiatives need to be derived from marketing objectives, and marketing initiatives need to be evaluated on a set of objective metrics. In simple terms, marketers need to define where they want to go (objectives), how they will get there (strategy), what it will take to get there (resources), and how they know if they get there (metrics). Creating an ROI culture does not mean every marketing initiative has to be quantified in terms of incremental revenue. Marketers can rely on intermediate metrics that follow customers through the "hierarchy of effects"- from creating awareness to changing perceptions, to creating demand, to enhancing loyalty and retention.

More difficult but equally important questions that CMOs need to tackle include ways to optimise marketing spending across channels and establishing the financial payoffs of longer-term marketing investments.

Point Seven: Embrace technology. Marketing is the last bastion for manual work in the enterprise. Most functions in the enterprise have been automated, including operations, finance, human resource management and sales. But marketing activities largely remain ad hoc and manual. This situation is beginning to change with the development of exciting new technologies for marketing resource management, marketing analytics and customer intelligence gathering. CMOs need to embrace these technologies to improve the visibility of marketing operations, to improve the efficiency of marketing processes, and to institutionalise best practices that have been encoded in software and tools.

I believe that marketing is the most fascinating area of management, because marketers need to combine qualitative insights and intuition with quantitative analysis and rigour. I also believe that marketing is the key to continued business success in a competitive world. However, marketing needs to change with the times if it is to stake its claim as the function that creates the most value for the organisation.

As marketing leaders, CMOs need to combine their passion for customers with a business value mindset, creativity with rigorous analysis and brand-building strategies with hard-nosed tactical execution. In the words of Lee Iacocca, marketing must "lead, follow, or get out of the way." CMOs must step up to the challenge or risk becoming figureheads in their organisations.