Marketing's job is not to sell. It is to create VALUE

To understand this headline, you have to understand that whilst making a good sale to a good customer is always a challenge (I am a huge fan of a skilled salesperson), making any sale to just anyone is really quite easy. You might simply reduce the price, or promise to throw in something for free. These shortcuts work (Google has loads of data to prove that) but most often will also make the brand look cheap. So it can be a sale that destroys brand value, making the brand synonymous with discounting or cheap prices. 

Great marketing does the opposite, it makes sales while adding to brand value.

Three things happened this month to make this even more crystal clear. 

 (1) Fear of recession put focus on short term sales, rather than brand

It’s not unusual when there is a crisis or a recession for a salesperson to tell the marketing folks that they don’t need to waste time doing brand marketing for a while. That’s because the sales happen at retail, at street-level, without any need for fancy advertising. This is true especially in high-ticket items bought in bricks and mortar retailer. You can track visits to the brand website, Facebook page, etc. but still have someone walk into a retailer and buy a car/TV/laptop from an individual salesperson who effectively takes all the credit and says ‘I made that happen’. Even if we know advertising causes people to visit the website we still don’t have a strong mechanic to tie that to the guy who walked into the retailer one day and put money down. 

 My colleague who works on an all-digital product can tell me how many ads, emails and newsletters the buyer clicked before converting. But in an online to offline customer journey it’s much harder. So whenever budgets are under a little pressure there is a tendency to cut back on brand marketing and spend money on retail promotions instead – mostly by discounting product. Which is fine, but what if you want your product to stay premium? You never see premium brands like Apple promoting discounts and that's why their marketers manage the most valuable brand in the world.

(2) Marketing is viewed as a COST in the annual budget round

The second thing happening across marketing departments at this time of year is a new financial year and a whole bunch of heads of departments totting up their budgets and asking for a marketing investment for the next year. When there is a risk of a recession (caused by a virus crisis or just about anything else) marketing is the department under most pressure. That’s because it is viewed as an expenditure or a cost and never an investment. This terminology is a disaster for marketers because it defines marketing as forever being a cost. 

The IT department will talk about the investment required to upgrade the BI systems or the productivity software. The engineers will talk about investment required in new product lines for future profitability. But marketing is treated as a cost like printer paper. It would be better if we didn’t use too much of it. Could we ‘get away with’ spending a bit less than last year? 

 It is ironic that almost with the same breath as treating marketing as a cost senior management might ask how much the brand is worth. What if a brand’s value next year was simply exactly how much we invested in marketing this year? The most valuable brands in the world know how and when to invest in marketing and they do it for the long term (look at the Interbrand Top 20 every year or examples).

In my time I’ve seen more management expecting value to go up while investment goes down than I care to count.  There is an expectation that a genius marketing team can make up for a budget shortfall. That’s like hiring Mozart but not allowing him to buy a keyboard. (Letters show that when Wolfgang stayed in Paris in a rented house with no keyboard instrument he would go around to a friend’s house everyday and sit at their keyboard and compose for hours).

 (3) Marketing creates Value, between the customer's world and the business

The third thing that happened was I attended Mark Ritson’s excellent Lowdown Webinar on marketing in the time of Coronavirus. He pointed out that marketing’s job is to create value even in a crisis. This means something so much more challenging than just making sales. He gave the example of the Uber Eats marketers who changed their App to allow the delivery guy to send a pic of the food sitting all wrapped up on your doorstep so that the customer doesn’t have to meet the delivery dude in the era of Covid-19 social distancing. 

His point is; the marketing team changed the way the app works. They got the techie geezers and the testers and the project approvers and budget-holders to all agree to change an app in a matter of days to respond to a new reality. They created genuine value for the customer. This is much more profound than coming up with the idea of offering 10% off. It is also much better for the profitability of the business than getting all your customers hooked on coupon redeeming. 

Mr. Ritson rather cleverly suggests that we can think of creating Value with a capital V when marketing connects the customer with the business. This means having a base in both camps, genuinely and deeply understanding the customer needs and desires plus the business capabilities and profit-abilities. I have visualised his thinking here, by way of wholeheartedly agreeing with him.

It means innovating to create win-win value for business and customer. It means we need to create value in the good times and in the midst of recessionary pressures too. It means clever and commercially aware marketers are going to create brand value more than IT departments, engineers or salesman. Maybe it means should think of brand value as the sum of the past value create, plus the year's marketing investment, plus new value we can create.

Like this:

I am not suggesting this is an easy to work out formula for us all to go away and turn into a number. However, it is a much better way of understanding the marketing challenge if you want your organization to grow and win customers profitably in the long term. If you are a commercially savvy brand marketer, you almost certainly agree. Now all you have to do is get your CEO to see things that way.   

With thanks to Mark Ritson, for being so clever. See more of his take on marketing in the Coronavirus era here... https://www.marketingweek.com/forget-about-empathetic-emails-during-coronavirus-and-start-making-your-brand-money/?nocache=true&adfesuccess=1

Register for Mark's Lowdown (free webinar) on Marketing in the Coronavirus crisis here.. https://www.workcast.com/register?cpak=9197723158008275&utm_source=marketingweek&utm_medium=email&utm_campaign=webinar_april2020