Strategic Marketing: What the CEO wants to know
Unable to hold the marketing function accountable, many CEOs resort to what, in the eye of their marketing managers, amounts to meddling if not micro-management.
Without the right explanation as to whether the marketing spend amounts to just that – expenditure - or if it actually enhances shareholder value, it would be reckless on the part of the CEO to assume that marketing will deliver results.
On the other hand, the marketing team will not move with much confidence if every decision they make is second-guessed by the CEO, often cheered by those “bean counters”.
Stuck on the road to nowhere, management will invariably go for a strategy session at which marketing would yet again present their plans for the coming year -this time promising even more growth and, ultimately, greater market share. At home with their numbers, Finance would quickly remind the marketing team of the figures they flouted last year that they have since forgotten.
While the smoke billows off the combustive relationship between Marketing and Finance, the CEO pegs hope on the chance that the brilliance of the marketing presentation will come through in good numbers through the subsequent quarters. But it never comes to pass. Welcome to the execution challenge!
60% of companies’ strategies fail at the execution stage. To paraphrase Quy Huy(Professor of Strategy at Insead, one of the leading MBA Schools), strategy is 5% thinking and 95% execution.
To focus marketing investment on the long term and strategic, the CEO ought to ask and insist on getting answers to critical questions. Here are five of them:
Do you have the right marketing strategy?
Most marketing teams think no further than the current fiscal year when mulling over their mandate to the business. They spend years on end fidgeting with what amounts to no more than operational plans, often based on arbitrary numbers handed down to them by the finance department. Before you approve the next marketing budget, be sure to ask marketing to demonstrate how it will contribute to the company’s success three to five years down the road. Will it matter to your most important customers? And will it build competitive advantage?
Do you have a plan to execute the marketing strategy?
Often marketing teams come armed with what looks like a good strategy, at least on PowerPoint. But you are not to be fooled. So follow with this next set of questions. Do you have a comprehensive plan to make it work? What are the measurable goals? The most common goal in marketing presentations is the usual twins- “build customer loyalty and grow revenue”. Don’t let them off the hook till they say how many loyal customers buying how much and by when?
Is the team up to the challenge?
Marketing is too important to be left to marketing people. Marketing strategies hatched without the involvement of the rest of the company are headed for doom. The promise that marketing makes to its customers is often only met if the rest of the departments do their part. That aside, there is wisdom in the adage - no battle plan ever survived the first shot. The marketing strategy is not complete without due consideration to the potential barriers and their ideal mitigation. The ultimate question for the CEO… what could go wrong? Sign off the plan if marketing has thought this through
Do you have the resources to get the job done?
Most marketing strategies are considered approved as soon the word "brilliant" drops off the CEO’s lips. Be sure to hold it in however much you like to the graphs and those witty commercials from the ad agency. When impressed, CEO’s that oversee successful strategy executions are keen to know whether their marketing team has the resources to get the strategy executed. Many don’t bother
Following a spate of acquisitions and greenfield launches across the continent, a West African bank decided to rebrand at a pan-African level. All was set and the new identity rolled out in their parent country only for the senior management to realize that most of their subsidiaries had just been launched with the old brand skin and were suffering cash flows too weak to carry the weight of a rebranding project. The entire exercise had to be put on ice, leading to an awkward identity split in different markets.
Do you have the right metrics for continuous learning?
This is by far the most controversial. When it comes to measuring performance, most CEO can’t tell the divide between their sales and marketing teams. Make no mistake; I am a firm believer that marketing must ultimately deliver superior sales performance. But selling is not marketing or vice versa. Confusing the two can be a tragic mistake.
In simple terms, if your business entails delivering products to customers who call in, then the job of sales is to get the customer to buy when they call in whereas the job of marketing is to get them to place the call. Your company’s revenue and sales will decline long after the marketing has let you down. By then, no amount of sales promotions will save you.
There are two types of customer loyalty that will drive your future revenues, namely emotive loyalty and inertial loyalty. You have the former if the customer purchase is driven by sheer love for your brand. It’s the latter if they buy for lack of a better choice.
And so the last question a CEO must ask - is your marketing team tracking the right metric? Can they tell you what base of your customers is emotively loyal? More often than not, they may be unable to. If not, why? Be sure it’s not because you denied them the research budget…
Article by Caleb Owino, the Managing Director, fireworks Advertising (U) Ltd