The ‘Colouring In’ Department
Pete Domican
I use strategy and change consulting skills together with extensive cross functional and cross industry experience to help businesses plan and manage change.
Why Marketing Is Struggling For Relevance And Why It Matters
The Chartered Institute of Marketing (CIM) offers the following definition for marketing:?“The management process responsible for identifying, anticipating and satisfying customer requirements profitably.”?
This would seem a vital role in a company. If you’re a company without enough profitable customers, then you’re out of business and if you don’t look after them then it’s a slow death. Yet in many companies, the above definition would be disputed and the marketing department is considered predominantly as a communications and promotion role. In some companies, you’ll not need long to find people who refer to marketing as the ‘colouring in’ department.
I’ll declare my personal interest. I was a marketing manager in my early career, I am still a Chartered Marketer and a Fellow of the CIM. Until recently, I was the Chair of the Levitt Group, the special interest group for Senior Marketers with the CIM. I use the skills I was taught in my Post Graduate Diploma virtually every day within strategy consulting and change management. And yet, my marketing experience seems to attract little interest compared to other aspects of my career.?
How did marketing become a Cinderella function and why is it a problem? There are a number of factors and a hint of self sabotage, which when combined create difficulties for marketing as a function.?
Customer Ownership
The first obvious problem for marketing is that it does not ‘own’ the customer. Marketing is not a direct customer facing role. It is a disadvantage in terms of ‘legitimacy’ although an advantage in terms of analysis.
It’s clear that other functions are talking to customers more frequently than marketing. In a startup, the founding team will have formed a deep impression of the type of early customer that buys their product. In larger organisations, the sales and customer service people will be speaking to people every day. In tech companies, a product manager identifies the customer's needs and articulates what success looks like for a product. That sort of looks like marketing.
The obvious conclusion from this is that those functions know more about what customers want than the marketing function. They will certainly tell you that they do. That may or may not be true.?
B2B sales people will always tell you that the price is too high because that’s what buyers say. Of course, the buyers are taught to say that, even if it’s not true!?
Customers typically ring contact centres when they have a problem. Therefore it becomes easy for functional heads in operations to make statements about customer needs based on biassed sample sizes, anecdotal stories or particular agendas around problems when the vast majority of customers may be happy enough with the service they get.
This problem of customer ownership has become increasingly a problem for marketing functions as the number of channels in which customers interact with an organisation, although ironically the strength of good marketing is being able to look across multiple channels and determine what the best mix of services may be for different types of customer. However the marketing function may not have the influence to implement that.??
The Rise of the ‘Growth Hacker’?
A growth hacker is someone who uses creative, low-cost strategies to help businesses acquire and retain customers. Sometimes growth hackers are also called growth marketers, but growth hackers are not simply marketers. - Upwork?
While customer ownership in general is a problem, marketing also has direct competition with the rise of growth hacking and product management in tech firms. Startups and early stage companies are by nature dealing with innovators and early adopters (see Figure 1 below). The same can be said for many technology products and features.??
Those who specialise in growth hacking use various types of low cost iterations and techniques such as A/B testing to produce persuasive copy, email marketing, SEO and viral tactics to?increase conversion rates and achieve rapid growth.?
However there is a chasm between those types of customers and the majority of customers who are by definition more sceptical and less enthusiastic but also have different needs. If we take the mobile phone and the internet as examples, we can see that it pretty much covers the whole of society and a far wider range of uses and usage than the initial customers.?
Understanding what different types of customer value and want is hugely important, which extends into data analysis, customer segmentation, environmental scanning, which require different routes to market, larger system requirements and much higher budgets.?
Many companies are making the mistake of promoting growth hack practitioners with only a subset of marketing skills into more senior roles, with no formal training. Without a more strategic set of tools and frameworks, many begin to struggle.?
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Innovation and Value
It’s fair to say that, of itself, marketing is not seen as the centre of innovation within an organisation. The tangible value of the product and service offering is typically created within the R&D and operations functions.?
However, marketing can and does create value over time through brand value. Branding builds customer loyalty. The premium Apple charges for a MacBook extends far beyond the technical features of individual products. While the visible output of branding is done through communications, the understanding of what creates and destroys brand value over the longer term is vital to success.?
The View From The Boardroom?
Few marketers are Invited to join boards of directors. In a US study, only 2.6% of over 65,000 board members have managerial-level marketing experience. And in a separate study, only 4% believe that marketing experience is important (versus 47% when it comes to finance).?
There is a common view that marketing is tactical, boards should be focussed on strategy and therefore marketing is not required. Increasingly one can start to see more elements of what would be considered marketing strategy move away from marketing into either a strategy function or chief of staff role.?
It’s an inconsistent view, in my opinion, given that finance is so heavily represented. If you’re making a strategic decision, then it would seem logical to consider what effect that strategy would have on your existing or potential customer base (and vice versa) as well as considering the financial implications.?
Although unspoken, there may also be a cultural element to this. Just 14.5% of marketers are between the ages of 40 and 65. The median age in marketing is 34 and the average age of an employed marketing director is 39 years old. Yet, for those companies that have them, the average CMO age is 54 (still the youngest of other C-suite roles) and they have the shortest tenure. One might hypothesise that younger people may not be seen as having the necessary strategic experience and, from experience, that could be justified.?
As an example, I once sat through a 30 min presentation / discussion board level at a company led by the marketing manager on the shade of navy blue for a brand logo. Now someone should care about pantones but it’s not a topic for a strategy away day!?
A Pinch of Self Sabotage?
Despite the best efforts of professional bodies like the CIM to promote the profession and raise industry standards through qualifications and continued professional development, marketing as a whole remains largely indifferent to these initiatives. It’s rare to see professional qualifications mentioned in job advertisements.
Marketers themselves often remain overly focussed on communications. Data warehousing, customer analysis, customer segmentation, competitor analysis, pricing analysis etc i,e, analytic skills just doesn’t seem to have the same appeal.??
Marketing At A Crossroads
It’s easy to see that marketing is sailing in troubled seas. While understanding and expectations of marketing is low and functional expertise provided by marketing departments are also low, then it’s unlikely to deliver the value it should to the business.
The $64,000 question is does it really matter? The answer honestly, is no, provided that all the processes covered by the definition of marketing, the elements of marketing - product, place, price, promotion, people, processes and physical evidence - and their collation into a coherent brand and brand strategy are being well managed and are providing competitive advantage.??
If not, and it’s a big job, then it might be time to think about upgrading your marketing function.?
Until Next Time?
Pete