PARLIAMENT’S LESSONS FOR MARKETERS

For several weeks, the newspapers have been full of revelations about members of Parliament their allowances and expenses. As a result of these revelations, several MPs are having to resign, some will be deselected by their constituencies, and some may even be subject to criminal investigation. The standing of MPs in the eyes of the British public has never been particularly high, but their image has now sunk to rock bottom so that many are regarded with contempt. It is a serious matter, because while the public believe in Parliament, they have lost faith in the integrity and judgement of MPs, to legislate on their behalf. It is quite obvious that some MPs were more interested in what they could get out of the system, than what they could contribute. The comparison of the high claims of MPs, with their voting attendance, makes interesting reading.
What has gone wrong? The underlying causes seem to be that MPs both individually and collectively, appear to have:
* Lost sight of their purpose and developed self interest
* Concentrated on short term objectives
* Failed to see consequences of their actions
* An inability to see how their actions are perceived, regardless of legality or intentions
* Failed to understand the perceptions of the electorate
But what has this got to do with marketing and marketing management in particular? In fact, there are quite a lot of lessons to be learned from this sorry saga, which apply to marketing management and business in general, especially during a recession. At such times, there is a danger that with falling demand and revenues, marketers and other executives are inclined to develop short-term thinking, which manifests itself in:
* Losing sight of purpose of the business
* The development of self interest for self preservation
* Concentration on short term objectives
* Failure to see long term consequences of actions
* Inability to see how actions are perceived regardless of legality or intentions
* Failure to understand the demands of the customer.
The objective of the Chief Marketing Officer (CMO) is to produce and maximize the profitable monetary income for the business. All marketers involved in the marketing organization are responsible for their contribution to maximize the level of profitable income. However, maximizing profitable income is not for the short term, but must be sustainable for the long-term. At the same time, the emphasis is on maximizing profitable income, so there is also the objective of minimizing costs, investment and the use of assets.
For most markets, demand usually slows during a recession. What this means, is that customers defer buying decisions until a later date, which slows the flow of revenue to the business. The reason customers buy products is not really for the benefit that they receive from the product or service, but for the fear of a problem unresolved, the work involved or the potential danger they face, if they do not have the benefit of the product or service. However, it should be remembered that demand has not gone away, but it has been deferred. The danger for a business is that if circumstances change, then the customer may cease to have a need and thus the potential sale is lost.
With the possibility of slowing sales and thus falling demand, what actions should the marketer take? Initially, the marketer needs to understand the current market environment, especially how customers are reacting and the problems that the customer is facing, only then can effective actions be taken for the immediate and long term benefit of the business. The immediate questions that need to be answered are:
* How are customers affected by the recession?
* Is their demand deferred – if so for how long?
* Have their priorities changed?
* What are their current problems?
* What are their fears?
* What assistance do they require?
The best way to illicit this information is by direct face to face contact with a customer or potential customer. In this case, the business with a direct sales force has a distinct advantage in customer relations, over the company that relies on web-sales or non- traditional selling methods. Answers to these questions may require a revision of sales expectations and cash-flow projections. In addition, the answers may suggest that when demand slows, for whatever reason, the sales and marketing communications message may need to be refined.
* Is the current marketing communications message suitable for current market situation?
* How can the sales message counter the deferment of buying decision making?
* What are the customer’s fears that influence the purchase?
* Without playing on customers fears, which would be counter-productive, what benefits can be stressed, which the customer might fear to lose by delayed decision making?
If marketers are to have credibility, they must develop and retain long term thinking while enacting effective short-term actions for the long term benefit and future of the business. Customers need to trust and rely on their suppliers, and suppliers need to understand and trust their customers. Developing and maintaining good customer relationships is essential for the continuity of every competitive business, and especially so during a recession. The example shown by Parliament of its relations with the electorate, is the antithesis of good customer relations.


© N.C.Watkis, Contract Marketing Service 15 Jun 09
Contract Marketing Service, (Marketing Performance Consultants)

June 29, 2009   Posted in: marketing management

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