Peter Drucker once said, “because its purpose is to create a customer, the business enterprise has two – basic functions: marketing and innovation.”
Over the last decade there has been a significant shift in how businesses and senior leaders perceive marketing. With endless rounds of cost cutting and restructuring, businesses have reduced their marketing capability without really understanding the true value of marketing or how it needs to operate in the digital world.
Technology has transformed marketing, its more technical, more complicated than it’s ever been. Marketing leaders are expected to make decisions that drive engagement and revenue on a daily basis which is challenging. There is no room for guess work when making the case for marketing budget. But without marketing representation at board level, it creates a vacuum resulting in CFOs setting the targets for marketing, based on growth revenue and no real understanding of what it’s really going to take to achieve it.
“Too many CFOs focus on the short-term financial impact of marketing spending, particularly sales revenue. More than 50% of CMOs we surveyed said they faced pressure from non-marketing leaders who “tend to focus on the short-run effect of marketing spending” and are “not patient for the long-run effects of marketing spending.” (source: The Role for Marketing in Digital Transformation & Innovation, Gartner Report 2021)
Technology companies reaching their 10-to-20-year milestone rarely have any budget for marketing, so they go without. With all eyes on next month revenue goals and performance, there is little time for marketing. So, it comes down to social media or a few emails, or being seen to launch or talk about something anything! But that’s not going to drive business growth.
With more and more digital marketing channels and automation being adopted, senior management can now access endless volumes of real-time data, making it easier to track ROI. But there is very little time for marketing on the weekly leadership agenda or even at board to fully understand marketing spend and the real impact on brand reputation and customer adoption/churn.
Is demand generation the key lever for growth?
With the growth of the software-as-a-service (SaaS) operating model, tech companies of all sizes have invested and fuelled sales and marketing using demand generation in a big way. And it’s easy to see why, when you consider the benefits.
• Drives awareness and interest to a company’s offering.
• Fills the pipeline with qualified leads.
• Accelerates customer acquisition and retention.
• Generates revenue and ensures long-term profitability.
But it doesn’t have anything to do with building your brand, competitive positioning and more importantly measuring customer/buyer perception, experience.
Today it’s easier to generate new products with only a couple of clients, sell it and believe this can scale into high growth revenues. But the truth is businesses are confusing this with a pilot. Everything is being done in half the time, which is causing problems as it can lead to going to market too early, changing proposition and messaging on the fly without customer or competitor input. With no buyer journeys built and no migration or upgrade pathways considered for customers this is causing another headache for marketing leaders, leaving no room for branding or real business case for the product or product life cycle to be mapped out, far less managed.
CEOs and their leadership teams need to make decisions based on one view of the customer, something lacking in business with too little time invested in connecting processes and cleansing customer data across all buyer touchpoints sales, finance, customer support, product development.
I think Drucker was right marketing and innovation combined with a longer-term vision is essential for business survival. There has never been a greater need for marketing expertise at board level. Non-executives with marketing experience are in the best position to challenge and ensure your business has a customer-centric focused strategy.
Written by Julia Duncan, qualified Marketing Director and Go-to-Market Transformation Leader, NEDonBoard member
Related Resources:
What can non-executive directors learn from the FCA Consumer Duty?
Championing the consumer from the boardroom
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