Marketing Expert's Corner
This article written in 2009
The Ownership Society
Property rights are a cornerstone of capitalism, and owning something confers an amazing array of privileges on the owner. Possession may be 9/10ths of the law, but right and title is what provides control and legal muscle. Owning important things is important.
Let's extend this metaphor into the organizational ownership of the important stuff of a company. Sales owns the revenue number and thus much of the short term stock price. Engineering owns the product evolution, consequently they own the expected future growth of the company (following the logic of The Gorilla Game, this means they own the premium your stock price has over the competition).
So what does Marketing own? In business school, it was "the four Ps." In the real world, it's a deeper question than you might think, getting into the role that marketing should play at a strategic level. This month's Taber Report may be sobering for some marketing teams -- but heck, if the banks can survive a Stress Test with a 100% pass rate, so can you! Put on your flak jackets.
Ownership is Power
Marketing owns the logo and the tag line. Yeah, right. These are not fundamental sources of wealth for any corporation. Yes, a brand can be powerful and provide competitive advantage, but it's a scarce resource that can be used up in a hurry by a negligent brand owner. Don't believe me? Ask General Motors or Sears, companies who drove their real brand value almost to zero. Was that the marketers' fault, or was it really under their control? Not likely.
Even at a purely marketing company like Pepsi, Taco Bell, or AFLAC, new Sr. Marketing VPs -- trying to through their weight around -- will almost inevitably mess around with the logo, tag line, or company mascot. They'll spend millions in advertising to establish their brand footprint and increase their recognition numbers. But prove that this moves the needle in revenues, let alone profits? Not likely.
But what about brand value calculations that show marquee marks are worth billions? You'll note that these numbers have been completely messed up by the stock market declines of the last 18 months, and there is now interesting work showing that the calculations were based on fallacious accounting assumptions (like everything else these days).
Marketing owns the ads. This is one of the most visible things marketing owns. But it's only indirectly linked to the wealth of the company (your Mad Men may scream "the biggest advertisers are the most profitable!", but even if that's true they're using reverse-causation on you). Advertising can buy you visibility, a layer of credibility, and some impulse buys, but it's extraordinarily rare to have ads actually increase profitability.
Marketing owns the press and analysts. They'd better. And if they're smart, they also own the social network surrounding your company, and are working their Web 2.0 magic to firmly establish both visibility and credibility of your company. You should be designing your conversation with the market. If your Marketing has this firmly under control, huzzah!
But marketing teams that aren't all over this one are missing an important trick. It costs almost nothing (other than time), and is more strategically important than advertising. Get on it!
Marketing owns the Message. Marketing should own the message, but all too often the rest of the organization isn't really listening. The Sales guys are often making up their own message to fit the needs of their territory, leading to cacaphony. The easy way to tell: count up how many different elevator pitches, sales presentations and telemarketing scripts are currently in use in the field. The other red flag comes when reworking the web site, where you can see a messaging tug-of-war about the home page contents.
Paradoxically, the way for marketing to really own the message is to deeply share it, and involve sales, consulting, engineering, and the CEO in message refinement. Listen in on what actually gets said in a telemarketing call. Participate in a sales call.* Talk with the guys in customer support to see what goes on with existing customers.
Marketing owns Sales training. Don't kid yourself. Sales management owns the real sales training, the stuff that goes on in the sales offices on a daily basis. Make your once-a-year sales training sessions as relevant as possible by working closely with sales management in the design and execution of the agenda.
Marketing owns channel design. Only in business school classes. Actually, I'm suresomewhere in my readership the marketer designs the channel...but I've never actually seen this. In 20 years of marketing. At over 50 companies.
Marketing owns pricing. While it's true that the market will dictate much of your company's price and discount behavior, the marketing organization rarely owns the price. All too often, that's Sales and the CEO...and marketing is at best a referee. That said, marketing shouldown the pricing model (which is strategically more important than the price point that others will force) and the price list (which needs to be kept simple, despite everyone's "great ideas." A streamlined and well executed price list will bring credibility to marketing, and can be the basis for healthy analysis that can be spearheaded by marketers.
Marketing owns the SFA system. At the risk of opening up a big religious battle: no. It's called a Sales Force Automation system for a reason.
That said, Marketing should own enough data quality and analytics so they can give definitive answers about:
- campaign effectiveness
- cost of pipeline generation
- product discounting
- customer usage patterns (e.g., "what % of our customers are on Windows?")
- customer satisfaction, loyalty, and renewal rates
For a number of reasons discussed in my book, it's important that marketing not be in the business of measuring or policing sales activities. That's the job of Sales Management, and having Marketing fall into that role is political suicide.
Marketing should own the references. References are an incredibly precious resource for any intelligent Sales or Marketing person, but the Sales guys jealously guard their referencable customers...even from other sales reps. Totally understandable, but a complete misuse of company resources.
The first step for marketing to identify, measure, tame, and own references is via customer surveys. Start by leveraging PR and your customer support team, getting them to annotate every customer conversation in your SFA system. Assign a marketing person to send personal emails and call around to every single customer, starting with the most recent purchases and going backwards in time. In a few months, Marketing will have made more connections with the customer base than any other part of the company. No sales rep will have the time to keep up with you (of course, be very careful to alert each rep before you reach out to his customer!), and you'll have more authoritative information about the customer than anyone else. This can be parlayed to...
Marketing should own customer loyalty. Of course, you never say that "we own the customer relationship" (Sales would freak out). But you can know more about what makes customers into repeat business, and set up customer loyalty programs for upsells and renewals. Marketing will need to work with customer support on this one, but they'll enjoy the attention (and if it's done right, so will the customers). Sales will take all the orders, but Marketing can be responsible for generating the pipeline of the most profitable business your company has: repeat business. Don't have a plan to own this property? Bust a move.
When this is done well, this loops back to branding, which nobody contests is Marketing's property.
Marketing should own the product roadmap. While engineering rightfully owns the product design details, Marketing should be controlling the discussion about tradeoffs like price, time to market, quality, and competitive position. Product Management needs to be chief advocate for The Vision, without being too "out there." They need to understand constraints, without being the person who always says, "can't do that" (leave that to Engineering). They need to make the business case without reckless forecasts (leave that to Sales). This is all hard work, but the product manager that is not able to guide the product's evolution will (typically) be the vassal of engineering.
Marketing should own customer design. This is a term that you won't recognize unless you've participated in my workshop, "Design your customer before you design your product." Designing the customer is a combination of segmentation, target market description, customer personas, and business model. Marketing needs to work very closely with the product design team and the Sales VP to forge a coherent and clear definition of how -- and more importantly -- the purchase transactions will happen. While everyone will have their opinions, nobody but marketing can see all the pieces of the puzzle. No other group but Marketing has the time to do the research -- and the convincing -- it takes to grease the skids for new business.
But the marketer that can pull this off can be truly called an entrepreneur -- the other core of capitalist success.
*Sales guys won't invite you along? This is a red flag of deeper trouble.
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