Thursday, 29 November 2012

Chess, advertising and marketing dis-integration

Marketers talk about integration. I think that is frequently a cop out. The real problem is a dis-functional misalignment of the business. In effect the business is disintegrated let alone their marketing and communication efforts. Here are the classic symptoms.

Finance create products to maximise short term margin. Operations want volumes of leads. Sales want quality of leads. Marketing use other metrics like customer satisfaction and long term customer value. All these objectives are in conflict.

Of course the we have to work within the constraints of the business but sometimes they are so restrictive they make everything you do a failure by one or other of the above criteria. If marketing want to get up the food chain, be more commercial, they have to help the business become more integrated. Everyone sharing the same objectives and vision. What do we want to be? How does this translate into business objectives? What do we need to do and really importantly what should we not do?

Solving the marketing version of the problem, communications integration, whilst the business beats itself up is nice but not that useful. Someone once said chess and advertising are the two biggest wastes of human intellect. There is some wisdom in that. Too much effort solving the wrong type of problem.

Do you know an organisation that fits the profile?

Wednesday, 28 November 2012

Short termism is the key to business success

What i didn't understand properly and what even the less imaginative accountants acknowledge is that profit is not an absolute concept. You tend to think of profit as something factual and indisputable. But profit depends on a variety of factors like how you decide to depreciate assets, how you treat the expected future flow of revenues from service contracts and at what point the costs hit the bottom line. Of course businesses think they are trying to maximise profits but the interesting question is over what time period. Those in the business who have a shorter term horizon focus on reducing costs and maximising margin, those focused on the longer term focus on maximising the contribution from a customer. In other words if you rip off a customer the chances are they will piss off earlier than you hoped. 

Unfortunately it is a lot easier to reduce costs and increase margin which goes some way to explaining why so many businesses have such a short term outlook and are run by accountants and not marketers. The fact that us marketers have managed to create a reputation for being being unable to add up and being not very commercial also explains why we are not on top of the pile.

About Me

My photo
United Kingdom
Just curious about marketing, psychology, economics, business, irrational behaviour, people, models, communications, advertising, market imperfections, b2b marketing. I work in the marketing communications industry for OgilvyOne.