Expert analysis from Colin Gordon, Author of "Marketing is in Trouble", and Founder, Engage Consulting.
Marketing isn’t like other business functions. It’s not bound by rules set down by some governing body; it can’t be inputted into Excel spread sheets; it doesn’t even have to be a function at all. But this is not new. It has always been this way. It’s around 100 years old – much older than a lot of other activities within the business world – but still has no simple, agreed definition, measure of effectiveness or set method of operating.
But let’s step back a bit. What marketing is, is only as important as what it’s not. It’s not a cost, it’s not short-term, it’s not about communications (ads and the like), promotions or sponsorships or events, although these may be part of what it is. It’s not a science and is not (necessarily) a taught or teachable subject.
All About the Transaction
Business is about how to match potential demand with possible supply, whether you’re a consumer goods company, a not-for-profit or a services business. It’s about the transaction, the sale. That’s the core of any business. Finance, production, administration, distribution, “HR” are merely there to service that core objective, to provide good governance, to report. They are the costs to the transaction piece. Often, they either collectively or individually, are optional; they could after all be ‘farmed out’. Nike owns no factories, Coke operates largely through other peoples’ (franchisees); Sage provides accounting, payroll and software to a whole range of companies, and they are not alone; there are any number of distribution, merchandising, even selling providers available; recruitment is now largely contracted out. Even if you’re one of these contracted companies for, say a delivery service, you can in turn ‘outsource’ those parts of your business operations that are not core to you or where the costs of holding on to them don’t make sense. No matter what your business, you need to transact something.
The Importance of Marketing
As far back as 1954, Peter Drucker (the father of business consulting) said that marketing is one of only two basic business functions (the other being innovation - in terms of innovative thinking and activity). All other functions, he said, are costs to the business. And marketing is where the transactional action of demand meeting supply iscentred. Marketing is where the business of the business happens. Nowhere else!
So, regardless of the size of the company, the sector it’s operating in or its business model, the one thing that is central to success, or survival, is identifying how that demand and supply interaction can play out, finding the consumer, understanding all the dynamics facing them, AND crucially ensuring that they can get to your product or service, buy-it and hopefully become loyal, repeat consumers as easily as possible. Your consumers are busy people. They are faced with time and choice pressures; they see contradictions everywhere – product X is good for you, then it’s bad for you; diesel was a ‘good’ thing until it wasn’t anymore; in most cases they have more to be doing with their lives than focusing on what you want them to be doing. And there are so many of ‘you’ even here in Ireland. Nearly 20,000 estate agents, 12,000 solicitors; over 150,000 individual items available through your average office supplies company, over 35,000 in the average supermarket. It’s estimated that consumers face 10,000 ads per day, carry out on average 70 transactions and 800 separate conversations per month. Most of what we do is not unique, and our customers or consumers are just coping with a whole bunch of demands, messages, challenges, choices, and contradictions.
And it’s that word “coping” that I keep coming back to when I think of marketing’s role in today’s business. With so many challenges and pressures facing both the consumer and business, it’s important to identify who is in charge of, and who is leading, the facilitating of the buying and selling. And these challenges, etc, are not just out ‘in the market’. Internally, there are pulls and drags and balances between the short term and long(er) term; there are stakeholder demands; funds are scarce; there’s a huge pressure in dealing with regulators and suppliers. Business is tough and things go wrong. The consumer might want “x” but it would be easier to produce “y”. Invoices contain errors, proof-of-delivery notes go astray, scheduling takes shortcuts to cut costs. Who is there in the organisation trying to make sure all the right things are in place to make sure selling is easier than otherwise, and by corollary to make sure buying is as easy as can be? It doesn’t have to be a separate function or department, or even a separate person. It doesn’t even always have to have a budget! It’s as much a mindset and the championing of ‘making selling easier’ as it is a set of activities all the way from designing a pricing strategy for the product to a new web site to an international launch. Ads or promotions may be useful (or necessary) but only to help drive the consumer towards making the transaction with you.
Making Sales Easier
So, marketing is all about sales, the transaction and my definition of marketing revolves around that: making selling easier. It’s ‘easier’ as it’s never done, never easy. It’s ‘selling’, and not just the operational act of taking an order; selling is more than that. It’s the reason for something being bought. Marketing in this way has the ability and responsibility to reflect the outside world (the market, the competition, the regulators, the consumers and their challenges, wants, needs) while knowing all the workings of his/her own company well enough to ensure all the blockers to making selling easier are removed or mitigated, while the enablers are enhanced. Marketing, regardless if it’s a function, an individual or a mindset sits across the whole of the organisation. It is not a series of activities, rather an approach to ensuring the sale can happen as harmoniously as possible. Marketing IS the strategy of the business, essentially choosing the market and designing the best operational methods to deliver the product or service as efficiently and effectively as possible.
Sitting across the business, the whole of the business, calls for a number of attributes – credibility among colleagues (built on a full understanding of the whole of the business); a true business acumen (not just a marketing education); intuition (knowing from a wide range of sources what is really going on in the wider relevant business environment); a long term approach (not to be way laid by demands of the Excel-junkies); and a collaborator (not just with colleagues but with supply chain and other external partners, with customers). Only with this real marketing mix can the role of marketing be truly holistic and relevant to the long-term performance of the organisation. Quite often the CEO will be the best marketer for your business. In organisations with fully fledged marketing structures, the ‘product manager’ is essentially the CEO of that product.
Marketing: The Shepherd of a Business
Marketing is sometimes likened to a shepherd. She or he tends to the needs and welfare of the flock ensuring its safety and access to good pastures, but astute enough to lead the flock to better pastures if the need arises. In this analogy the marketer is a leader and a carer, is well attuned to the needs of the ‘business’ (the flock) and knows where is best for it. There’s no mention of costs, no mention of ads or anything similar as being at the heart of marketing, no requirement of a separate department. Marketing – insofar as it champions the transaction and the customer at all points of the business - sits at the centre of the business while having the lead role in designing the strategy of that business.
Touchpoint Analysis
The best way to evaluate the totality of the business’s approach to making selling easier is what I call a ‘Touchpoint Analysis’. This approach forces the company or the marketer to look at how the company organises itself at every stage of its interaction with the consumer, whether it’s obvious or not, and asks if each and every point on the interaction could be an enabler or a blocker to that consumer’s possible purchase or repeat purchase. From how the product or service is ordered by the primary customer, to it’s being produced correctly, to how it’s shipped, to how it appears on shelf (if that’s relevant), to how the customer is invoiced, to after sales service, to the appearance of the delivery truck, the manner of the personnel on call centre lines, delivery trucks, merchandisers and at the reception desk, to the ads. It’s as simple or vital as how hard it is to open the pack, the user instructions, the range available. And it’s about so much more. It’s a constant assessment to ensure the hassles are removed and the advantages are enhanced. In that way, marketing is not ‘just’ about the visible stuff around ads and sponsorships. It’s the invisible stuff of how all parts of the supply chain and the wider environment are coordinated and directed to make selling easier, to service the customer and, as a shepherd would, to protect the ‘flock’ in a complex, challenging and dynamic business world. Drucker was right then and is even more correct now. Marketing is the essential business function, regardless of your size, sector or business model.