The most important marketing lessons ever forgotten

Probably one of the most tired but frequently used expressions in business and government is “lessons will be learned”. However, only individuals can learn lessons, and when those individuals move from the organization, so the corporate lessons and memory move with them, so that lessons have to be re learnt, and frequently the “wheel re-invented.

In the commercial world, those activities involved in producing income by getting and retaining business, otherwise known as marketing, often involve staff whose tenure in post is measured in months rather than years. Surveys by the CMO Council and the Chartered Institute of Marketing suggest that on average, marketing staff stay only 18 to 24 months in post or less. In such circumstances, how can long term objectives be achieved? When events occur or there are changes in market conditions which cause lessons to be learnt, how can those lessons be implemented if the personnel who supposedly learnt them are no longer there? Institutions and companies are made up of people, so that such corporate memory as there is, only exists in people that work there. Where there is a frequent turnover of staff, there is little scope for corporate memory, so that the personnel frequently waste time and resources reinventing the wheel. This is particularly apparent in marketing organizations, where the short term nature of staff manifests itself in a culture of constant change. There is nothing wrong with change, but the nature of change and its frequency can and does cause problems, especially when they are not fully implemented before being changed again. With frequent changes of marketing staff there is a cost to the business in loss of knowledge and experience, plus the financial cost of recruiting, and training.

Managers of marketing are responsible for producing sustainable profitable income for the long term. To do this effectively, requires both new ideas, experience of the market and an understanding of the business’s previous business getting and retaining activities. The problem for managers of marketing, is that survey evidence tends to show that a majority of marketing practitioners see frequent job change as a way of career development towards a high paying placement. This is may be good for the individual, but it is not good for a business, as such people generally do not think and act for the long term benefit of the organization,

The late Robert Townshend, former chairman of Avis and author of the internationally acclaimed best seller, “Up the Organization,” understood that for any business, “Marketing was the name of the game”. By this, he meant that marketing was fundamental to the business as the management of all those activities involved in producing sustainable profitable income for the long term future of the business. However, while agreeing the fundamental importance of marketing, Townshend was not a believer in marketing departments.
He took the view that marketing strategy should be decided by the chief executive officer (CEO) who should be responsible for making overall profits, and another senior executive who would be responsible for producing the necessary sustainable profitable income. That person might be given a variety of convenient titles, from director of business operations, to director of marketing or sales and marketing, but their job would be to maximize sustainable profitable income, while minimizing the use of marketing investment and resources.

Townshend advocated using outside full service marketing agencies, as a cost effective alternative to employing ,internal marketing specialists, as it reduced the marketing overhead, and gave greater flexibility to use resources as necessary. These marketing agencies would provide specialist support as and when required, for marketing communications, market research, customer relationship management, and any other specialist services required which could also include the contracting out of selling operations.

The advantage of using outside specialist agencies and contractors, rather than employing internal specialist staff is that their collective experience is usually greater than would be expected from an individual company employee. Agencies and contractors provide services only as and when needed, providing increased flexibility for the client company in their use of assets and investment. At the same time, specialist contractors and agencies usually look for long term associations, providing a stability which may not be apparent with marketing employee who may be guided by short term personal interests. While Townshend’s approach may not appeal to all, it does have some significant advantages, especially for those small and growing businesses with more limited resources requiring greater flexibility in their use.

For companies large and small, there is a long term marketing advantage in retaining strategic policies and decisions with senior managers, while sub-contacting all specialist activities elsewhere. By the flexible use of out sourced specialist marketing contractors, managers of marketing may minimize the use of assets and resources and limit the risks of their marketing investment, while retaining control of corporate memory, objectives and policies for the long term benefit of the business.

© N.C.Watkis, Contract Marketing Service 02 Jun 2010

June 8, 2010   Posted in: marketing management

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