Monday, August 07, 2006

Who is a successful Marketer?

As a marketing professional, I am always on the lookout for various metrics to measure the effectiveness of the marketing department. I have also written about various metrics - Brand Value, Customer Relationships, Customer Lifetime Value, Brand recognition, and Sales revenue. From my past experience at Silicon Valley companies, the one truly good measure of a successful marketer is "GROWTH" - both top line & bottom line growth.

In today’s fast paced economy, growth in revenue & profits are the most important factors which determines the success of a company. Other metrics are important - but they do not measure the success of the company on an yearly basis.

Today, consumers have developed resistance to advertisements; the competition for customers intensifying; the growth of many companies and industries; particularly in consumer products are slowing; line extensions proliferating without a clear benefit to brands; and the costs of advertising being perceived as increasingly burdensome; the conventional ways of organizing marketing departments seemed more and more out of sync with company needs. For example, McDonalds has been one of the most well recognized brands in the world, yet in 2005 the company is in trouble.

Coming from silicon valley where the belief is unlimited opportunities but constrained resources, the only marketing metric that matters is growth. To achieve this growth, functions of the marketing department must stretch beyond the traditional roles of marketing. This starts by marketing taking ownership of the company’s key growth-support functions - though they are strictly not marketing functions.


To drive growth, marketing leaders must:

  1. Identify their contributions to revenue growth. I.e., they must be able to quantify certain revenue growth % that happened because of marketing activities.
    For example, the advertisement campaign in Q1 & Q2 resulted in 8% increase in revenue. If marketing leader can identify their contribution to revenue growth, then he/she can define the Return on Investments (ROI). Ability to define a ROI for marketing activities will help marketing gain additional authority in taking business decisions.

  2. Take ownership of new tools & processes needed to improve efficiency.

    For example, at British Telecom, marketing drives the IT in developing new tools or processes to improve customer interactions via web/Internet. The existing sales tools are constantly reviewed and means to improve efficiency are discovered. I had earlier written about Self-Service-Technologies (SST) - and its impact on customer satisfaction. In today’s customer centric view of business, marketing has to driver all the tools and technologies - with which the company interacts with the customer.

  3. Provide proactive guidance and services to rest of the organization.

    For example, marketing leaders provide the details of future market requirements to engineering and R&D - thus help them develop better products. Similarly, marketing works alongside sales to locate opportunities. They suggest appropriate channels for products; they research the behavior of current and potential corporate customers, both as buyers and influencers; and they take part in the innovation process for new services and products.Marketers can be strategic leaders. They can spearhead product innovation, new business development, positioning, channel strategy, pricing, and communications — not just providing services to the company’s strategists, but helping to design and shape that strategy in a more customer centric way.

  4. Drive the growth agenda in C-suite meetings.

    Marketing provides market research data - but along with it, marketing leaders identify new opportunities and provide strategies to capture these new opportunities.

    For example, When Abby Kohnstamm, who led IBM’s marketing for most of the Gerstner transformation, left the Chief Marketing Officer position in 2005, she was replaced by Bruce Harreld, who oversaw strategy for IBM during those years and now has jurisdiction over both marketing and strategy. Last year, for example, Coca-Cola Company announced it was eliminating the position of chief marketing officer and rolling marketing, innovation, and strategic growth leadership into a single corporate function. Coke followed Pepsi, Intel, IBM, Samsung, and other pioneers in explicitly linking the marketing function and the imperative for growth.

  5. Hire people who have a broader range of capabilities than their counterparts in other companies.
    Hire people who assume strategic responsibilities in addition to, not instead of, more traditional marketing mandates. But they approach conventional communications activities with what seems a greater degree of sophistication than the average marketing team has. Their success showcases how cross-functional expertise, deep analytical skills, and leadership of the growth agenda can supplement front-line marketing savvy and contribute to top- and bottom-line results, even in the most mature industries. The existence of a distinct, growth-correlated marketing team is not obvious at first glance, even to longtime marketing practitioners - and this team becomes a source of competitive advantage.

Marketing led growth

To understand the distinctive edge that marketing led growth leaders hold, consider the role of the marketing department in the transformation of IBM. At the beginning of the 1990s, IBM’s glory days were far behind it. The company had failed to recognize that the computer market had changed and that hardware increasingly was a commodity. Its pricing power eroding, the company recorded $16 billion in losses between 1991 and 1993. In 1994, IBM’s new chief executive, Louis Gerstner Jr., refocused the organization, beginning with an effort to listen more closely to its customers. The new intelligence gathered by IBM revealed that customers cared less about computer products than they did about solving enterprise-related IT problems. The resulting shift in IBM’s corporate identity — from product manufacturer to solutions provider — made possible the company’s dramatic recovery. Mr. Gerstner established IBM Global Services and tasked the organization with opening new channels that would enable information to flow among the various businesses so that comprehensive solutions packages could be developed.

By breaking down the silos that had existed across the business units, Mr. Gerstner enabled the development of a "brand-based" operational model, similar to that found in consumer packaged-goods companies. In this environment, collaboration among marketing and other functional areas drove brand and product development.

Mr. Gerstner and his senior team then reorganized the sales force along industry lines, defined 14 industry sectors as critical for the company to dominate with solutions, and appointed leaders to spearhead initiatives in each sector. This new sales force brought to market bundled hardware, software, and service packages that could be sold at a premium. Ten years later, IBM is the world’s leading provider of technology services and solutions. The company is customer-focused and marketing-driven. IBM ranks third on Business Week’s 2005 list of the Top 100 Global Brands (after Coca-Cola and Microsoft).

IBM’s marketing organization was integral to the change that Mr. Gerstner drove, and represents much of what a Growth Champion marketing team should provide. Big Blue’s CMO is a member of the executive committee and advises the CEO on strategy. Central marketing defines corporation-wide marketing plans and objectives; analyzes, segments, and targets markets; positions brands; and monitors and consolidates communications.

Closing Thoughts


Marketing led growth tends to be more common in technology driven industries where introduction of new products is an ongoing challenge. In service industries - be it IT or Financial services, marketing role is largely limited to customer relationship management.

Product companies tend to have a strong marketing team in place and can use it to help make the evolutionary step from marketing mastery to true growth oriented company. Marketing leaders who seek growth can be strategic leaders. They can spearhead product innovation, new business development, positioning, channel strategy, pricing, and communications — not just providingservices to the company’s strategists, but helping to design and shape that strategy in a more customer centric way.

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