The Marketing Function Is Strategic, Not an Afterthought

marketing function is strategicThe marketing function gets no respect. In B2B companies with less than $100 million in revenue, it’s the lowest rung of all the business functions on the ladder.

Why? Because everyone thinks they understand marketing, yet few do it well. Actually, not quite everyone, but ask 10 non-marketer business people to define marketing and you’ll hear answers like:

  • It’s advertising
  • It’s brochures and slogans
  • It’s lead generation
  • It’s fluffy creative
  • It’s consumer research

Since all of these responses are activities that fall under the marketing umbrella, they’re not nearly as bad as my favorite “intelligent” explanation, which came from a technically-trained entrepreneur: Whatever marketing is, it just doesn’t work.

Yes, he really said that. And he was CEO of a $15 million dollar computer distribution company. His company treated marketing as a tactical activity necessary only when sales were slow. And any marketing they did had little strategy behind it and was executed poorly–typical results for a company approaching the marketing function as an afterthought.

The Marketing Function Is Strategic

And therein lies the problem: In B2B companies with less than $10 million in revenue, this approach is far more common than a seasoned marketer would ever guess. It’s the norm; not the exception. Marketing is considered inferior to Sales in the pecking order, and, in fact, to practically every other business discipline. Most companies at this level won’t hire skilled marketers, instead forcing low-cost, inexperienced admin folks to handle ad hoc campaign execution from ideas cooked up by their sales team.

Why?

Because they don’t respect the marketing function.

The marketing function is strategic. Executing marketing activities are tactical.

Symptoms of Marketing Disrespect

Throughout their lifecycle, B2B companies run into a very common set of growth problems:

  • Revenue growth is slowing or has stalled
  • Revenue forecasts are consistently missed
  • Sales reps have to discount to close the deal
  • Prospects fall out of the pipeline and nobody knows why
  • Pricing power erodes and margin shrinks
  • Company growth lags behind market growth

When these problems occur, some typical responses include hiring a new sales manager, replacing sales reps, retraining the sales team, buying new CRM, or changing the sales structure and compensation plan.

Rarely does a CEO of a company facing these problems ever realize that marketing, or a lack of consistent marketing effort, is often the root cause of ALL these problems.

A common cause of the majority of B2B growth problems is a lack of respect for the marketing function, and a failure to commit to a continual investment in marketing activities.

Generally, the burden does not fall on the CFO, the technical team, HR or the VP of Sales. It rests primarily with the CEO.

The Argument for Marketing as a Strategic Function

Since I’m placing responsibility directly with B2B CEOs, I had better clarify my concerns.   I’ll start by suggesting a definition of marketing that could apply to everyone:

Marketing is the continual process of developing and communicating value to all prospects and customers.

Peter Drucker famously said many years ago that business has only two functions — marketing and innovation. Innovation involves product development, market need, design, engineering, production, and all the blood, sweat, and tears it takes to bring great offerings to the market.

Everything else is marketing. Sure, companies need people to support all that innovation and marketing (handled by Finance, Accounting, HR and Admin), but Drucker’s point is clear.

Sales is a part of marketing. It’s the back-end of the marketing process. But far too many companies make the mistake of having their sales reps handle both the marketing and sales roles. How common is it to look at any $5-$10 million B2B company and find that the sales team is responsible for generating their own leads, closing their own deals, and supporting their own customers?

After working with hundreds of companies over the last 15 years, I believe marketing would get the respect it deserves if CEOs would embrace this single distinction:

  • Marketing covers the one-to-many communication. It could be one to a thousand or one to a million.
  • Sales covers one-to-one communication, company to company, to get the deal.

The latter is more important for short-term revenue, but the former is more important for long-term growth.  Typically, a company that does not respect the marketing function simply increases their sales force to try to get more one-to-one conversations in order to achieve a few more deals and tepid revenue growth.

Respecting the marketing function means committing to a defined, continual process of developing and communicating value to the marketplace. It’s communicating value to the masses AND to the ones who are ready to buy.

It’s a strategy. And it should be implemented continuously.

By making a decision to treat marketing as strategy instead of an ad hoc expense, companies can avoid the myriad of problems I listed earlier.  It’s a simple but effective change, and it’s driven by respect.

If you’re not convinced, here’s an example of a rare CEO that treated the marketing function as strategy from the day he founded his company. That strategy was a key driver of his growth from zero to $1 billion in revenue in only 10 years.  Read about it in his book Behind the Cloud.

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