Monday, 28 January 2008

Making Marketing Matter: Impact At the CEO Level

Why is being the CMO one of the riskiest jobs in America?

With the reality that it is hard to quantify marketing in terms of tangible business results, marketers tend to go to the next best thing. Visible Impact which often equals a refocus on the advertising.

“The practical reality is that if you’re a sophisticated marketer, you are aware that advertising is less and less important in your overall marketing mix. However, the conundrum is that advertising is the most visible. This is why people tend to migrate towards fixing the advertising even though other broader customer experience problems may exist,”

- Joe Tripodi, Allstate as CMO

It's a cycle however, that sees short term perception benefit to that leads to longer term lack of success. We all may know that - but how are we able to get marketing and brand up on the CEO agenda?

Part of the issue is tangibility. Quantifiable data will always have the strongest impact. We saved X dollars by reducing our call centre calls by Y. Fantastic. Totally tangible. The only problem is the fuzzy research that the marketing department gets that suggest the reason we had Z churn that same time period is that the customer was rushed off the phone and ended up being pissed off and canceled their service.

But Ops still got their bonus. And the CMO still got fired.

How can we reconcile this gap?

Learning from other disciplines that have had similar challenges is a good first step.
And one of the my favorite examples are, environmental planners. For example, environmental assessors of the past would only view a new say, dam project, in terms of cost and benefit. The cost would be the actual dollars associated with the project and the benefit would we the number of jobs created for the building of the project etc. However, what rarely got assessed were the softer measures such as the social and or cultural costs (a flood plain would destroy the last 1000 year old community in the region). Thus social impact assessment was born.


IMO of the most important things that SIA attempts to do is to quantify less tangible impacts that allows the environmental impact assessors to create a weighting and ranking model that are inclusive rather than solely focused on the economics.

It all sounds very scientific but the issue here, is that people use numbers to tell stories. Some of the stories are true and some of them quite frankly are a load of hooey. What SIA does is it levels the playing field so that traditionally non-quantifiable objectives and results have a voice.

Brand and customer relationships have a parallel relationship with the the social and cultural aspects of environmental projects. We know and understand their importance, but we also watch as they get eroded due to budget constraints and "business fundamentals". We have learned what the results of ignoring them is for EIA, but we are only beginning to understand what the same risk is within a business context.

Many moons ago, I spoke to one of the foremost SIA specialists in the world, Reg Lang, who was game to apply his SIA methodologies to a CEO performance model that was inclusive of marketing. Now we just need a client brave and willing.

As my friend Fraser would say, Bueller? Anyone? Bueller?


Gavin Heaton said...

Very interesting ... SIA? Will have to investigate. I love the idea that people tell stories through numbers ... I had never considered accounting in this way before. Brilliant. Suddenly changes a whole lot of my thinking.

Leigh said...

Gavin....find us a client...i'm working on it too....seriously think this could be really significant...

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