Rumors of Marketing’s Death have been Greatly Exaggerated
I wouldn’t go so far as to suggest I’ve been pining for the good ol’ days of marketing…but I do think that after 25 years we are about to move back in that direction. Here’s why…
Marketing, in theory, is built on the management of Pricing, Product, Promotion and Place (the four Ps). But, decades ago, shrewd business leaders latched on to a fifth, different “P” that was highly useful in our economy the last 25+ years – that’s Proliferation. This ‘P’ changed the game for businesses and fueled growth and bottom line success for decades. This was possible because markets were young and strong, consumers didn’t mind complexity and offering multiple product variations helped corporations drive up their market share.
My opinion is shared by Ken Wong, an associate professor and distinguished professor of marketing at Queen’s School of Business in his recent paper, The Incredible Shrinking Marketer. In the paper, Wong writes: “These were brand new products, so lifecycles were very long, “ he adds, “there were no concentrations in the retail channels and largely fragmented distribution, so suppliers had the power in dealing with all channel members. Customers had no expectations and were happy with what they were getting.”
When Proliferation took off as the backbone of the business strategy, the marketing department quickly shifted its thinking to accommodate it. It had too. And, as the decades wore on, that shift grew and grew. Customers went from people’s names to numbers. And those numbers had metrics attached to them. For the most part, those metrics embodied cold, impersonal business objectives that fed stock prices. Wong also writes about this: “Suddenly, everything was now measured against financial contribution. The unity of the marketing effort drifted from a common focus on satisfying the customer to a common focus on satisfying the shareholder.”
Today, with the impact of social media, coupled with many other factors, the proverbial river of Proliferation may have dried up. Consumers have more choice than ever. They have more insight too. Consumers demand simplicity. Proliferation created complexity. Products are truly commodities now and price pressure is immense. Many argue that this change will result (has resulted) in a complete collapse of traditional Consumer markets.
How will business adapt?
Gary Vaynerchuk said it best: “Saying ‘hello’ doesn’t have an ROI…it’s about relationships.”
While it sounds trivial, corporations will need to get back to basics and focus on the reason they exist in the first place – the customer. They’ll have to do more than sell to them, they’ll need to satisfy them.
This sounds easy enough, right?
Well, it turns out that shifting the foundation of a corporate strategy can, sometimes, feel similar to how one would imagine Egyptian workers felt when building the pyramids – immense human resources dedicated to moving volumes of heavy material over long periods of time to build massive stone blocks.
It’s a great analogy because, in the end, if companies arrange their blocks correctly, the modern day outcome is the same – people are memorized by the stock prices and ‘innovation’ of corporations that get it right, just as we are mystified by the wonders of the great pyramids.
However, large companies are at a short-term disadvantage in this new reality because shifting focus can be like turning an aircraft carrier – it takes time, skill and patience.
There’s a great example of this trending on social media now. The example comes from a recorded phone conversation between an unhappy customer of Comcast and (ironically) a representative from the company’s customer retention department. Have you heard it?
You need to stop and listen to the conversation know to understand my point. https://soundcloud.com/ryan-block-10/comcastic-service
“We are dealing with empowered customers, people who want their products customized to their requirements and delivered where and when they need it most. It’s a difficult environment in which to deal when you’re coming at it from a one-size-fits-all perspective,” writes Wong.
The Exciting Opportunity for Marketing
Good news. The CMO and the marketing department are needed now more than ever. The CMO should feel as invigorated as Superman after someone destroys a load of kryptonite draining his powers. Brand management is needed more than ever. Relationship Marketing and storytelling is needed now more than ever.
The route forward? CMOs and marketers need to seek responsibility for any decision related to the Four Ps of marketing. This is marketing’s purview and includes customer engagement, customer service, any and all customer-facing interactions. Once under marketing’s wing, customer-focused, relationship marketing programs need to be developed and accelerated. Marketing is best suited to understand the customers on a 1:1 basis, to craft a credible message for those individuals, to encourage and convince consumers to buy on their terms vs the company’s and most importantly, to deliver the brand experience that will keep the customer aligned and coming back over the long-term.
While I believe experts and academics like Ken Wong would agree with this. The marketing community has a long road to travel to assume control of these business areas. Wong has many statistics that help us understand why this will be difficult for marketing to do – including a 2012 Economist study that determined the role of marketing is quite fragmented from organization to organization. And, he also points out, that in 20% of all firms the CMO is considered ‘ineffective’.
Regardless, marketing cannot be dormant while the business adapts to the changing marketplace. In an environment of constant change the CMO must obtain CEO and executive support. To do this, the CMO must be well versed in the shifting customer demographics – and must be able to incorporate big data, analytics, cloud computing and social media strategies to align the C-suite – and the whole business – with the customer.
I think of a quote I stumbled across (on social media) from a Turkish playwright named Mehmet Murat Ildan that reads: “Every time it rains, the soil counts every drop to know exactly how many times to thank God.”
While the entire business has to quickly deal with the empowered customer, Marketing is the only department that the CEO should charge with defining the brands relationship with them. This is the key link to brand awareness, brand reputation, loyal customers, repeat customers, happy customers and an expanded customer base.
Otherwise, why do marketing at all?