Helping marketing rediscover its core purpose

Irony is a valuable tool in story telling or dramatic setting. It is used to cause the reader or the audience to think about how two things compare, or not; it emphasises a central idea or point.

I see irony in the way marketing has developed – from being called out as the core function in a company, to becoming increasingly misunderstood and mismanaged. This irony is particularly strong when it comes to GE (previously General Electric). In GE’s annual report of 1952, the company – already a significant player in so much of the daily lives of American households through its industrial and consumer products – was able to say: “Marketing will have authority in product planning, production scheduling and inventory control as well as sales, distribution and servicing of the product.”

This statement of the importance of marketing to the company paralleled well with a lot of the business thinking of the time.

Sometime earlier (1931 to be precise), Procter & Gamble had emphasised that the ‘brand manager’ was to be thinking of every aspect of the brand, and in 1954, Drucker (the father of business consulting) declared that a business had only two basic functions: marketing and innovation, all others being costs. So, GE in 1952 was cementing an increasingly strong view of the importance of marketing.

By the early part of this century marketing is now seen as pervasive. It forms part of our culture, it occupies a lot of college spaces, tens of thousands of books have been written about it, and several million Linkedin users (or is it followers, or subscribers?) have “marketing” in their job title.

So! All good in the land of marketing? Well, maybe not so much as might first appear. And here’s where the irony kicks in. Just over 30 years after GE’s confident pronouncement and direction, the same organisation, through its high profile leader, Jack Welch, made a speech in New York (12th August 1981) called “Growing fast in a slow-growth economy” which is now seen as the birth of investors’ obsessive focus on shareholder value.

This led to a laser-like emphasis within companies across many geographies and sectors on market value.

Bonuses share price growth, M&A programmes, fancy and fanciful financial “instruments” all began to predominate in business, in college education and in investor expectations.

Where once a solid dividend policy was seen as the signal of a blue chip company, now it was share price growth and dividend growth, combined. There was a sudden switch to a much nearer term management focus and everything was evaluated based on paybacks, a disciplined approach to the financial numbers, returns on investment (and equity) – and, critically for marketing, cost control.

Welch wasn’t solely responsible for the irony. But his company’s move to shareholder value as the key metric, along with the many others who quickly jumped on board, made marketing less of the focus in board rooms and amongst senior management. Marketing is by nature longer term, less numbers-oriented and more about the approach to the business and its long term relationship with the customer than to the next quarter’s stock market news and the required and regular market value growth.

To add more stress to the struggle between the “scientists” (finance, production distribution functions) and what Rory Sutherland calls the “alchemists” (marketers and – in my view at least – innovators), in 1985, the business world was presented with Excel. The world suddenly became ruled by spreadsheets.

Scarce development work

Any set of numbers on an X/Y axis can be made “work” if the assumptions are predefined. That’s not marketing. I’m not saying that marketing should have done nothing and just sat back to see these initiatives roar around them. But during this time, it seems as if there was scarce development work being done on what marketing was to do in a fast-changing world, how it should respond, or even what is was, how it should be even defined.

In my researching the topic there seems to be limited evidence that marketing thinkers and indeed practitioners were continuing the development of marketing in the way that seems to have occurred with such a pace in the 1940s, 1950s and 1960s, where such profound elements of marketing thought and process as the 4Ps and (marketing) positioning were introduced. In many ways, marketing did what it most definitely was meant and designed not to do – it forget its own purpose: to keep innovating, to keep an eye to its relationship with the rest of the business, to ensure the company was maintaining a long term view on retaining customers.

Marketing was described by David Packard in the early 1960s as being too important to leave to the marketing department. Because it was seen (pre-shareholder value formation) as so core to the whole of the business, it needed to be and be seen as being both necessitous and merited. The more it was excluded from the Excel junkies’ way of working, the more it was seen as something dispensable, something apart.

Another irony is that while all this focus on spreadsheets and market values was gaining traction, the vast majority of companies are not plcs, do not have formal marketing departments and may not even “practice” marketing. But the science approach to business was all-encompassing, taking in all types and sizes of company. Not having a marketing structure or department doesn’t mean that marketing is not important to the organisation.

Marketing is all about making the consumer’s journey to purchasing your product or service easier all the time. Marketing is making selling easier and therefore making buying easier. It is not advertising or price discounts or new ways of winning a weekend in some five-star hotel. They are not irrelevant in all cases but a certainly not what marketing is only meant to be.

If marketing is to return to its central role in any business it needs to find out how the business is set up to enhance the selling process or how that set up causes that process to be undermined. I call it the touchpoint analysis – assessing and evaluating every single element of the business that may impact on the customer. The call centre, reception, after sales service, product performance, the product’s real value (as opposed to a nominal price point), the invoicing system, the proof of delivery, the sales unit (case size, minimum order quantity), the waste element, the professionalism of the delivery staff, the state of the truck doing the delivery . . . every single element of how the item is bought or sold; every single part of the relationship with a customer or consumer.

Business is all about the sale, identifying and retaining a customer. Who in the company is best placed to focus the company on that task? As Drucker said more than 60 years ago, all functions apart from marketing and innovation are costs and as such they can be farmed out, given to third parties to perform.

Marketing as such doesn’t have to be a separate function. It’s as much an attitude and approach as a set of processes and tools. In more structured organisations, it may indeed be done by a separate department but no matter, it must never lose sight of its central role in thinking long-term about customer retention and ease of selling.

Marketing needs to find a way back to its core purpose and undertaking a regular touchpoint analysis just may be the most fundamental way to do that.