Friday, 10 April 2020

Why marketing is much more than communications

I often hear this question, so here is my response:

Marketing is how you create, communicate and deliver value to customers.

Create - it is the role of the marketer in your business to show genuine interest in the needs of customers and try and understand and interpret it and bring that information back to the business so that it can be used to develop products and services.

Communicate - the part we all know of, yet it is much more than advertising - or "Promotions" - one of the four "Ps" of marketing strategy. You also communicate subtle messages through how you "Price" your product, where you distribute it ("Place")  and the "Product" itself - the features, quality and design of it. All four Ps play a role in communicating with customers.

Deliver - the process of getting value out of your building and into the hands of customers is the ultimate goal. This is not about logistics, but the result of successfully creating and communicating value to customers.

What is Value?

The economic or emotional benefit that a customer gains from consuming your product or service is the value they gain from it. It's critical to understand the difference between value, price, and cost. In a well functioning, the business allows the customer to feel they get more value than what they pay for, while still pricing it far enough able the cost, to make a profit.

 - Happy customer: Value > Price
 - Happy business: Price > Cost

The moment you have to drop the price to compensate for poor value perception, you are playing with fire since you are risking profit - the fuel that any company runs on.

The only way to understand what is deemed valuable by the customer is to speak to them. It is for them to decide what is useful, hence the importance of constant market research to understand customer needs better.

The role of a business is to manufacture, package and distribute value to customers and receive cash in return that keeps the company going another month. 

Do you need a marketer?

All businesses are inwardly focused. Topics that dominate the agenda are matters of production, sales, operations and people. The customer is not physically present and quickly forgotten. Someone in the company must represent the customer, which means actively taking an outside-in view of things. Stirring, in a sense.

At a push, the Owner, CEO or MD can play the role of "market representative" by intentionally stepping out of the office to take a fresh look, but this hardly happens under stressful commercial conditions. Salespeople, on the other hand, are also poorly equipped since they are often blinded by the deal, unable to take an objective, critical, customer-centric view. The ideal is clearly to assign the role of Strategic Marketer to someone.

Marketing is only optional, unsuccessful and generally "fluffy" when it is treated as an arbitrary communications function done by a junior employee good at taking orders.

But the role of dedicated marketer does not have to be a permanent position, especially in industrial and professional services environments where clients are mostly other businesses (B2B). Market dynamics tend to be more stable with large, established competitors and customers. It is indeed possible to get a professional marketer from the outside to help see things from a different perspective and then formalise critical findings into a strategic marketing plan that can be reviewed regularly.

Market orientation as the ultimate goal

Ultimately, a business needs to be market-oriented. Focused on meeting customer needs firstly, then meeting its own. How to become market-oriented is the real issue, and this is where the current, best solution is to employ a senior marketer. Someone assigned explicitly to keeping the business honest by gathering information on customers and competitors and then formulating value propositions and messages that will attract customers and result in more money in the bank.

Strategic marketing is a business-critical function and not something to be seen as optional. A well-defined marketing strategy and plan with clear actions to help a company position itself in the market and communicate to customers almost always unlocks significant additional turnover and profit. Marketing is only optional, unsuccessful and generally "fluffy" when it is treated as an arbitrary communications function done by a junior employee good at taking orders.

Any business selling stuff to customers and clients, whether products or services, is doing marketing in some way or another. The question is, do they actively get involved in how they do marketing and deliberately try to do it better? Marketing is the part of your business that stretched from your front door to the customers' porch. It's that big, wide-open space between making something, and selling it.

The best companies in the world make sure they don't leave the marketing of their offerings to chance. They know what marketing involves and pay special attention to it. 

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