By Jonathan Knowles
Marketers have a poor record of responding effectively to questions about marketing accountability from their business colleagues (especially those in Finance).
Too often our response has been to look for a “silver bullet” – a single financial metric that we hope will provide the definitive proof of marketing’s value to the organization. Our collective obsession with ROI and with brand valuation are classic symptoms of this “silver bullet syndrome.”
As a former Finance person, I am bemused by marketers’ response. Accountability does not equate to a single financial number. Accountability is about providing a compelling argument for how marketing is adding value to the business.
In my experience, there are three truths that it is helpful for marketers to understand about their colleagues in Finance:
• First, the business case for marketing is not intuitively obvious to anyone who believes (as most Finance people do) that humans act on the basis of rational economic maximization;
• Second, Finance people are most comfortable when they are asked to fund a strategy (a coherent, mutually reinforcing set of actions) rather than a single tactic;
• Third, Finance people consider the main drivers of financial value to be profit, growth and risk – ROI is measure of short-term efficiency.
The third point highlights the tragic irony of the current situation – marketers’ embrace of ROI as the “silver bullet” of marketing accountability has actually reinforced Finance’s impression that Marketing is as a tactical, short-term discipline.
I have found that the most effective approach to engaging in a discussion about marketing accountability is to address the three truths above by providing the following:
• Evidence for the extent to which the customer purchase decision is driven by factors other than simply functionality and price (this establishes the strategic role of marketing in generating customer value);
• Presentation of a cohesive “go to market” strategy for delivering customer value across the full range of possible sources (including product functionality, purchase convenience, service quality, perceived value – not just communications);
• Identification of the business metrics on which I expect the impact of this “go to market” strategy to be most powerfully observed.
When approached this way, I have found that the potentially confrontational debate about accountability is transformed into an insightful discussion about how the company creates value for its customers and shareholders.
Jonathan Knowles is the CEO of Type 2 Consulting and author of Vulcans, Earthlings and Marketing ROI (2008).
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