Can marketers game the system?

Both the marketing press and academia appear to concentrate on the marketing structures and organizations of larger companies, rather than that of small and medium sized enterprises (SMEs).

According to statistics for 2008 from the UK Office of National Statistics, SMEs with fewer than 50 employees made up 98% of all registered business enterprises, while companies with over 250 employees made up just 0.4% of all business enterprises. Marketers responsible for getting and retaining business will tell you that it is hard work, especially if they are employed in an SME. In most SMEs, marketers will not have the luxury of marketing departments supporting them, but if they have responsibility for getting and maintaining income, they will have to be masters of many disciplines, unless those disciplines can be sub-contracted. In such circumstances, the marketer may be directly involved in all the specialist disciplines, including selling and negotiations. What is certain is that the performance of the marketer working in an SME can be directly measured in terms of the sustainable profitable revenue that is produced and the costs and investment required producing it. In most SMEs, every penny counts, so marketers have to be clear about what they do, how they do it, what it costs and how much money they contribute.

However in larger firms, the responsibilities and accountability of marketers can be quite different. In these firms and organizations, the marketing department can be a place where some people build successful careers by developing their own image, but potentially wasting time and money by avoiding the scrutiny and the quantified measurement of their their real contribution. How do they do it?

There are still many marketers who while publically agreeing that marketing performance should be measureable, privately consider marketing to be an art that does not lend itself to meaningful measurement and will do their upmost to ensure that it stays that way.

The enthusiastic pursuance of various marketing fads, such as unsuitable CRM packages, ventures into “Total Quality Marketing,” or unnecessary and expensive re-branding exercises that do nothing to increase income, but add substantially to costs, are just some the activities where time and money is wasted . These activities may be summed up in the term “Gaming the system”.

“Gaming the system” is a term that refers to the way people in organizations will, if allowed to, operate the corporate organization to their own advantage, rather than to the advantage or objectives of the organization in which they are employed. Gaming the system can operate in all aspects of an organization, and is the result of weak management.

How do Marketers “Game the System”? There are many ways, often related to “visionary ideas” that do not relate to the purpose of producing sustainable profitable revenue, either in the present or the future. Here are just a few:

* Maintaining the idea that marketing and sales are two different disciplines, rather than accepting sales as being that integral part of the marketing function, which is directly concerned with customer satisfaction and income production.

* By eschewing responsibility of sales, marketers can avoid being accountable for income generation.

* By pretending that marketing is a strategic expense without which a company withers and dies, rather than in the management process that that requires investment to produce sustainable profitable income by identifying, anticipating and satisfying customer demand.

* When sales go up, claiming that it was the money spent on advertising and communications that produced the increase in sales. Alternatively, when sales go down, claiming that without advertising and communication, sales would have been worse. Since in most cases the effect of advertising and promotional activity can rarely be quantified accurately, these views are difficult to contradict.

* By ensuring that all reports are written with the latest jargon and “business speak” in order to confuse the reader and disguise the paucity of the argument.

* By convincing the company that its future development depends on a large budget to “invest” in a new corporate image, logo and vision statement, all of which are expensive, but not necessarily contributively to producing profitable revenue

* Ensuring that all performance measurements are based on activity not results, thus avoiding any performance measurement that would allow management to assess the overall contribution in a quantified manner. Defending the need for large budgets, but ignoring the need to quantify the resulting contribution.

It is very easy for marketers to spend money to develop brand, market share and customer relations, but it is much harder to demonstrate directly how such investment contributes to producing profitable income. “System gamers” may have no difficulty in demonstrating what and where they have spent money, but justifying what was spent, in the amount of profitable income produced may be a lot harder.

“Gaming the system” works contrary to the business interests of a firm, because it wastes time and investment. Therefore recognizing how “Gaming the system” can manifest itself in marketing organizations is important, if management are to effectively counter its effects. To do this,
managers responsible for getting and retaining business need to;

* Accept that getting and retaining business costs money and therefore all investment, costs and assets must be used efficiently and effectively

* Ensure that all activities involved have quantifiable performance measurements based on results.

* Ensure that marketing staff have clear job descriptions with defined areas of interest and responsibilities.

Marketers have an important role in every business, as they have to produce the income on which it will survive and grow. Those with ability will prove their worth in the income they produce and the efficiency with which they do it. Those that “game the system” will ultimately be found out, either by diligent management, or their firm’s bankruptcy resulting from their failure to produce the profitable income necessary for its long term future.

© N.C.Watkis, Contract Marketing Service 26 Nov 10
Contract Marketing Service, (Marketing Performance Consultants)

December 6, 2010   Posted in: marketing management

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