BNET Insight

Sales Machine

A, Always. B, Be. C, Closing.

Why Marketing Wastes Money.

January 3rd, 2008 @ 5:28 am

50 Comments

Categories: Blogroll, General, Sales Tips

Tags: Function, Conversation, Sales Strategy, Marketing Research, Sales Force Management, Sales, Marketing, Geoffrey James

Marketing wasting time and moneyWhenever I take Marketing to task for wasting money, marketing folk try to explain how fundamentally wrongheaded I am. For example, the blogger Jacqueline Barnett, in a comment to my post “Market Requirements = Garbage,” complains:

“[Marketing] is a strategic, complex function which defines performance and tactics for achieving the business plan - including product design, pricing decisions, integrated communications to all channels and through all media, and leading and managing distribution and sales strategies and performance.”

Similarly, BNET member Slocum fumes:

“Indicating marketing is essentially worthless shows Mr. James lack of knowledge of what marketing’s role in a company is/should be. Marketing is more than promotion activity. The function includes competitive positioning and priority setting of activities across the company to ensure the company meets the promise being set forth by the company to the market.”

But there’s one thing missing from these oh-so-important sounding job descriptions: what’s the quantitative measure? Every other department in the modern corporation is measured quantitatively, with that measurement directly tied to their day-to-day activities. By contrast, all the activities that Barnett and Slocum list our are basically un-measurable and thus can’t be proven to be useful, useless or irrelevant. And I’m votin’ for useless.

For example, how do you measure “defining performance and tactics” - by the number of pages in the interoffice memo? And how do you measure Marketing’s contribution to “product design?” By the success of the final product? Even though the features that Marketing requested were impossible to implement? How do you measure the impact of “integrated communications”? And “priority setting of activities” and “ensuring the company meets the promise”? Unmeasurable fluff, all of it.

As I’ve repeatedly blogged, Marketing should be goaled and compensated on one thing: generating qualified leads. If generating qualified leads were the gold standard for measuring Marketing, the activities that Barnett and Slocum slapped onto their list would fall by the wayside, because that list is just a string of impressive-sounding biz-blab and buzzwords.

More importantly, comments from marketeers often reveal a profound disrespect for sales professionals. Check out this comment BNET member Tony Wanless:

“Marketing has to figure out generally what the target customers’ biggest problems are, and sales has to go in and explain how the product or service will fix that problem and provide value to the customer. That means, of course, the sales people have to help prospects identify their individual problems. But too many sales people just go in and browbeat the prospect with the features of their “solution”, without ever listening to the customer in order to identify what the problem is.”

Yeah, that’s right. Sales people are all about browbeating customers. Except for the fact (which Tony would know if he’d ever been on a sales call) that browbeating rarely worked even back in the day, and it’s now completely ineffective in today’s highly consultative selling environments. There a word for sales reps who browbeat. That word is “unemployed.”

Hilariously, Wanless thinks that Marketing is going to figure out what customers really want, and then tell Sales. He’s got it exactly backwards. Marketing needs to go to Sales, find out what customers need, and then find prospects that match those needs. Most Marketing folk have absolutely no selling experience, so consequently their opinions on customer needs are consistently worthless.

As I pointed out in my post “Sales is Essential — Marketing is Not“, talking about selling with your typical marketer is like discussing intercourse with a celibate priest. The conversation tends to be embarrassing rather than enlightening.

This Blog's Best Post: The Ultimate Cold Calling Tool

 
Reply to Story

BNET TalkbackShare your ideas and expertise on this topic

Subscribe to this discussion via Email or RSS

  •  
    1

    Sid Herron

    01/03/08 | Report as spam

    Any specific recommendations?

    You've spent a number of posts hammering away at how useless a "classical" marketing organization is. Actually, I happen to agree with much of what you've said: the ultimate goal of marketing should indeed be to generate qualified sales leads. I'm very curious to know whether you have any specific ideas for what kinds of marketing activities would do that in our high-tech B2B world. Perhaps that will be the subject of a future blog?

  •  
    2

    jackiebarnett

    01/08/08 | Report as spam

    Marketing is / should be performance drriven

    Great response. I am also looking forward to positive suggestions that indicate an interest in sales and marketing working together, as is the case in a well-functioning company.

    It seems in this BNET series of messages, where Geoffrey James describes that "More importantly, comments from marketeers often reveal a profound disrespect for sales professionals," we have brought a terrific issue to the forefront to work on solving - on both sides of the table. Can sales and marketing function as a seamless team in achieving corporate objectives, or is that impossible due to opposing paradigms?

    A huge part of marketing is defining and measuring whether the strategies are working, or whether there needs to be some adjustment in the strategies. Yes, marketing is strategic, and sales is tactical. Sales can be readily quantifiable because it is about numbers - marketing has to - and should - work at defining quantitative performance measures.

    Last July, BNET provided a great tactical plan on making marketing performance-based...http://findingtheupside.blogspot.com/2007/07/speaking-of-budgets.html

    Often companies, especially new or smaller companies, don?t have separate marketing divisions or employees. The executive team or sales department sets the direction for the organization?s products and / or services, with the perspective that common sense decisions about the product and sales channels will suffice. Too often this direction is set internally from the perspective of the product or service development divisions, rather than by strategically evaluating customer groups and their needs, or the impacts that the legal, political, economic and other environmental will have on marketing decisions. For these young companies or companies that have gotten into the mode of selling a relatively successful product over a long period of time, marketing often becomes an exercise in advertising technical features in well-known channels, rather than promoting the benefits that meet current targeted customer group interests. http://findingtheupside.blogspot.com/2007/07/what-is-marketing.html

    Based on your current perception of marketing, how would you define the best that marketing could be within your organization?

  •  
    3

    Geoffrey James, Sales Machine

    01/03/08 | Reported as spam

    RE: Why Marketing Wastes Money.

    Good idea! Meanwhile, this post is a good place to start:

    http://blogs.bnet.com/salesmachine/?p=51

  •  
    4

    jackiebarnett

    01/08/08 | Report as spam

    The intersection of sales and marketing

    Geiffrey, this is a great article. Thanks.

  •  
    5

    MIVFox

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Sometimes the truth hurts. I'm making everyone in my marketing department read this - pronto.

  •  
    6

    SteveRider

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    The results of marketing are measured in the market share gains relative to competing products within specific markets. Lead generation is one component of the promotional mix. Many people equate marketing with advertising. It couldn't be farther from the truth. Our marketing department we track metrics for awareness, opportunities generated, channel coverage, channel productivity, channel competence, leads generated, lead conversion rates, and many other metrics. I recognize that selling is a difficult profession where you often have to create your own demand, but that doesn't diminish the role of marketing.

  •  
    7

    SteveRider

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Just another comment, take two similar products from different companies. One company is well known and the other is not. Which sales person will have an easier time penetrating their targeted accounts (assuming the salesperson has a relatively slim book of past customers)? The company that is well known didn't just "get that way." It was likely attributable to some effective marketing.

  •  
    8

    Java3232

    01/04/08 | Report as spam

    These posts are always fun

    Hi Steve,
    First I have to say that I have an MBA in Marketing. I have to get that out of the way so you don't say I am clueless about Marketing. Anyways, I was just reading your response about 2 companies with similar products and how they became well known. I work for a company that was unknown when I started 6 years ago. (There is a powerhouse in our industry that is very well known.) Six years later our company is becoming known and it was ALL done by selling. We do not have a marketing department and we do not use marketing materials. In fact we were on the INC 500 fastest growing companies list 4 years in a row. All without the help of a marketing department. Sorry Steve...but I really do not agree that unmeasured Marketing is the answer for every company. Our marketing was measured by our sales team (of which I am at the top) finding leads and bringing in customers. No fancy talk there...

  •  
    9

    SteveRider

    01/17/08 | Report as spam

    love these posts...

    So your Inc 500 company has never done a press release, pursued an article in a magazine, published customer testimonials, created data sheets for your products, created competitive sales sheets, created a company logo, developed a compelling value proposition, put up a web site? My hat's off to you. BTW - I never said you shouldn't measure marketing, as I mentioned in my post, we clearly do and every marketer should.

  •  
    10

    mchobot

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Warning!! From a marketeer...

    Spot on for the most part... For my awareness and lead gen efforts, I track inputs and outputs. Inputs are raw leads generated, outputs are qualified leads flipped to sales. There are a number of internal measures that we also look at but those two are the ones that matter most to my boss, the CEO. But... that's for the outbound part of marketing.

    On the inbound side, I would agree that sales input is critical but marketers should get their butts out of the office and go on sales calls, meet with existing customers, etc. to hear it first hand. I've found that, because sales people are incented to close the deal at hand (with good reason!) they often don't dig into areas where the offering lacks capabilities or otherwise isn't a good fit. Who wants to screw up selling what you've got by talking about what it ain't?! I've got a number to make this quarter, after all!

    Also, I've learned the most from talking to customers after deals that we've lost. Good sales people follow up on lost business and learn a lot - but it's good to get a second touch point with the buyer on why the deal went south. Sometimes they'll tell you things they don't tell the salesperson.

    Last, because good comp plans for product marketing and product management organizations are focused on longer term yet still measurable goals (e.g. the p&l of a specific product or offering) - those folks will tend to focus more on the gaps. And, with smart requirements gathering, you can monetize the gaps by creating innovative new products.

    Another way of saying this is that the feedback I've gotten from my sales pros has been critical input for incremental innovation (e.g. the product we sell today doesn't do x, y or z - and if it did that would help us sell more of it) and it's pointed to opportunities for new products but hasn't provided all of input the company has needed to bring those products to market.

    -m.

  •  
    11

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Exactly Right.

    You've provided a perfect definition of what Marketing should be doing. I note that your job description is long on substance and short (very short) on buzzwords.

  •  
    12

    Java3232

    01/04/08 | Report as spam

    I agree

    The buzz words are annoying! happy That is a large reason why I stepped away from Marketing. Too many people throwing around words that most people don't understand just to justify their jobs! happy

  •  
    13

    healthitvendor

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    I completely agree. To be completely blunt I have no idea what many of the terms mentioned - channel competence? - mean. As a one-man show for a rapid growth Health I.T. firm, I sit near the sales team and listen in on their sales calls. I hear our sales reps doing product demonstrations and making calls - it's the overheard conversations between prospects and sales reps that gives me most of my marketing content that focuses on solving our prospect's problems.

    From here, I use mostly web-based marketing tactics (email, SEO, etc.) to reach potential customers. I do not have a degree in marketing, nor do I have formal "marketing" training. However, I can say that my sales reps have more leads than they can even follow up on - and with a company in a rapid growth phase, the marketing budget is nearly zero. I'm expected to deliver 200 leads with limited/zero resources - my goal is 200 leads/mo for a $100k average sale. Lead > Opportunity conversion is another matter - a sales team goal - but I am measured on raw leads alone. This is certainly a quantitative goal, is it not?

    On a daily basis I ask my sales team what they need from me to ensure that they are CLOSING DEALS (ummm, isn't this the ultimate goal... lead > opportunity > sale?), and in return I ask that they provide certain information back to me in order to track the performance of particular marketing strategies.

    Perhaps I am naive and inexperienced, but my "marketing" team (me), is around to listen, question, probe, and ensure that my sales team is supported on a daily basis and given the tools and qualified leads they need to make their numbers.

  •  
    14

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Excellent

    Here's what's needed in other marketing groups -- measurable goals and the correct attitude, which is that Marketing provides a Service to sales. The way some marketeers talk you'd think they were the Master of the Universe.

  •  
    15

    Java3232

    01/04/08 | Report as spam

    This is a great post!

    Perfectly describes the role of Marketing!!!

  •  
    16

    bernard.otu@...

    01/03/08 | Report as spam

    Sales and Marketing- A symbiotic relationship

    If everything was measurable, there will be no point of creativity and innovation. Microsoft would have computed the success of google and outdone it...and according to my calculation, we will still be bartering the same widget to everybody because we can convert and sell the entire world on the same widget.

    Simply put, the is no metric for the calculation for creativity and innovation because it ultimately involves risk, courage, and perseverance and etc. You cannot predict the markets behavior and create a relevant metric in time to capture that information. Worse of all providing qualified leads to sell the same widget whiles your competitor has developed a new product and worse off there has been a paradigm shift towards that product can kill your business. If you worked for microsoft you will still be selling windows and creating a better windows since you have no marketing department till eventually you die because you customers moved to web applications.

    Creating a better, faster, responsive widget is not always the answer. Sometimes there is no market for the widget. Most times the customer does not know what he/she wants. The market has to be created. With the structure of the sales system today, how is the sales person to discern this unknown and unmet needs. And if he/she did they are a marketer not a sales person regardless of what their title says.

    If marketing is a car, sales is the wheels to get it to its destination. One cannot do without the other. A great marketing strategy is irrelevant without the sales force to see it through. And continuing with my car analogy. Great performance cars are ones that the wheels communicates with car and vice-versa. It means the car responds excellently to road conditions. And when the car has to change a direction the wheels adjust and perform beautify. The wheels speed and performance can be measured. They are closer to the ground, the people. However, though the car is not as close to the ground as its wheels, it has to make unquantifiable decisions such as which direction should it take at this intersection. And 8/10 times, the probability of it been a mistake.

    Any modern, learning and intelligent business would realize the importance of supporting and naturing a great trust relationship between sales and marketing not the opposite.

  •  
    17

    stevehindley

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    I have been in industrial B2B sales for 8 years and am now in "marketing". I do think that if you have high-horsepower staff that can both think strategically whilst still achieving month-to-month sales targets then essentially "marketing" and sales can be handled by the same people. BUT - if a company puts such pressure on the sales department to achieve ever-more "simple" results (like volume or price etc), and also cost-cutting pressure is applied to production/engineering departments, all in the quest for quarterly results - then I can see that neither side has the incentive nor resources to be inclined to do any activities that would ultimately increase their work-load (possibly jeopardizing their "simple" results) and be contradictory to their performance measures. In this case some other function capable of divorcing itself from day-to-day activities and being given the appropriate incentives may be more inclined to take on longer-term value adding activities. Of course, there are stellar companies that set performance indicators perfectly for engineering and sales departments that enable them to divide their time ideally between the immediate results and the strategic health of the organisation - but they are not common.

  •  
    18

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Compensation!!

    Man, you are right on target here. Big time. The biggest mistakes that companies make is compensating Sales on revenue rather than profit. Compensate on profit forces Sales to look to Marketing for services that reduce the cost of sales, like providing of pre-qualified leads. It also prevents Sales from making revenue quotas through unprofitably discounting.

  •  
    19

    p.pavlidis@...

    01/03/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Listening to your customers through sales people is one aspect of marketing. Without marketing philosophy is very difficult to get out and sell your products or services. Marketing can de defined as "fullfillment of customer benefits at a profit"..from that definition you can understand that marketing always has as a prime target the profits. I beleve marketeers should focus not only on quantity of marketing (just do research, advertising, promotion, etc) but also on the development of mechanisms to control quality of marketing (how we implent marketing activities. Marketing is essential and it is not accidental that all people saying we do marketing..but the problem are they really do...Perhaps there is the misunderstanding!

    Dr. P.M.Pavlidis
    4/01/08

  •  
    20

    Marketing VP

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money

    I'm getting bored of this Marketing bashing now... any chance these blogs can add some contructive value or indeed that BNET can allow someone with a more open and rounded business view actually contribute to an article in the first place. Even I have time and would be happy to oblige!

    I also noticed in the most recent post that other contributors were quoted but not the ones with whom the author could not reasonably argue! I'll simply accept that the author's views do not represent sales prefessionals per se and consign them to an antiquated stereotype.

    I reiterate:
    Poor, unmeasurable performance across all functions must be unaccpetable in today's sophisticated business world - all commercially savvy marketers agree with you and of course accept that this extends to Marketing too!

  •  
    21

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Don't worry...

    ...I'm getting back to the "how to sell" stuff shortly. As refuting every comment, I don't have time, so I pick the ones that I feel best represent the serious conceptual problems that cripple the effectiveness of the marketing function.

  •  
    22

    An Expat in France

    01/05/08 | Report as spam

    ...Say what?

    You're a Marketing VP and you choose to complain about the author's slant? There are so many non-spin issues to discuss here...

    Stop whining about the rules of the game you chose to play - just move the ball forward.

  •  
    23

    ptiseo

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Another tired re-tread.

    The "Sales Machine"blog should actually consider being re-titled to "Excuse To Bash Imperfect Marketing Groups".

    Note that the author wastes our time by basically comparing good, "other" departments to bad marketing departments. IOW, a good, old-fashioned strawman argument. Also, he misconstrues a commenter's post (Tony) to try to bash even more, and then cherry-picks from those who agreed as if he spoke the Heavenly Truth.

    I could just as easily turn the tables and compare bad sales groups to good marketing groups. Maybe I'll start my own reptetitve blog? Does BNet pay you per word? *They* may need a new metric of blogger performance.

  •  
    24

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Blogging

    Does BNet pay you per word?

    I wish!!!

  •  
    25

    jslocum1@...

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    I must chuckle at your response to the feedback you received. It is true that marketing as with other business functions should have metrics. However, your basic attitude of marketing being an unnecessary function is so far from reality it is humorous.

    Perhaps you are writing these notes as a way to generate material for your next book and/or lecture series. Hopefully, you are being trained properly from the feedback.

    As an individual, who is running two companies, including a professional services firm which provides marketing and sales direction, implementation and management, I have seen many tries at using just sales people to build the revenue generation portion of the business. Sometimes this actually works. However, when it does, it is because the sales person did the marketing function with out the title or they happened by chance to fall into the right market position early on in their sales activity.

  •  
    26

    Zimm01

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Ah the eternal struggle between Marketing and Sales. All sales people think that if only they had better leads and sales material they would do great and all marketing people think sales people are lazy.

  •  
    27

    bellco

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    A few years back, saw an article on how Coca Cola put a metric on sales conventions. (Took a bit of thinking on their part.) Maybe some people will work out a loose metric for marketing. [Sort of like a producing a metic for advertising, risk management, etc.]

  •  
    28

    JoySonn

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    True marketing is strategic in nature, i.e., long term. Day to day activities are more easily measured--a salesperson submits a monthly report for XX number of calls, yielding XX number of quotes, etc. If you don't think it's valuable, think about this...are you brand loyal with certain products? Why? The swoosh, the "it's the real thing", the widespread availability of product through channels, the messaging and competitive research on how to position the product are all marketing activities.

  •  
    29

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    B2B vs B2C

    Your description of brand building applies to B2C but not to B2B. B2B is quite different because the buyers are far more sophisticated. Managers with purchasing power are in the top 5th percentile of intelligence compared to the general population. They're much too sophisticated to fall B2C marketing techniques in their business activities.

    Of course, executives may fall prey to B2C marketing in their personal lives and buy some dumb luxury item they don't really need. But they typically don't gamble their career and their company with impulse buying -- at least not if they want to remain in a position of responsibility.

  •  
    30

    JoySonn

    01/04/08 | Report as spam

    B2B / B2C

    Hello. Well aware of B2B vs. consumer marketing. My global company markets B2B but the principles of branding, distribution, messaging, etc. still apply.

  •  
    31

    Edsahara

    01/04/08 | Report as spam

    Nothing New Here

    This is a very old arguement. I don't think any marketer will say that every dollar they spend hits the target. In the end though marketing is held accountable in strong companies. If sales and market share aren't meeting objectives, that's measurable.

    I think if the author is going to ask the question, "Why marketing wastes money," he should come up with something more useful than "go to sales" because "our (marketing's) opinions on customer's needs are consistantly worthless." And yes, Mr. James, I have selling experience.

  •  
    32

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    Want more?

  •  
    33

    david.burnett@...

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    So, in your opinion, where does advertsing fit into the marketing and sales equation?

    I have worked in both small business and the corporate world. I have been in both outside sales and in a home office marketing environment. I agree that as a salesman, I had a lot to offer the marketing (and product developemnt) end of the business. But, advertising? Maybe I worked in a different world, but I think that advertising without the marketing department is nuts.

    My two cents.
    An Okie Marketing Machine

  •  
    34

    Emp Rx

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    KISS. Let's keep this revolving argument simple.

    The primary goals of the sales function is to to uncover and satisfy a need, or recognize a problem and provide the solution.

    Marketing's function is the message, letting the market know you have the ability to satisfy that need or provide the solution.

    The success of both have performance metrics that can be measured.

  •  
    35

    White Shark

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    I am in Marketing and I believe we must test and measure what we do just like every other department. When we do so if it is not working..STOP doing it! And we must listen to those who know our target group..any body in the frontline..customer service people and our sales people. In fact anybody not in the frontline needs to listen to those on the front. After all, our company needs to be a team all working for the same goal. None of us are an island unto ourselves!

  •  
    36

    lisalaskey

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Face it gang: James is just shooting straight on target. No doubt he carries the marketeer-as-useless-hack stereotype to the extreme but I've had to face it, - and his words resonate throughout my communication business strategies and the continued cultivation of my own personal sales education: "Hilariously, Wanless thinks that Marketing is going to figure out what customers really want, and then tell Sales. He???s got it exactly backwards. Marketing needs to go to Sales, find out what customers need, and then find prospects that match those needs..." At the end of all of my boutique's strategic shenanigans, we (sometimes with hat in hand) return qualitative data in kindergarten format of - sales after me minus sales before me; my greatest asset is an enthusiastic, open-minded sales team. Thanks Gregory for the smackdown.

  •  
    37

    Geoffrey James, Sales Machine

    01/04/08 | Report as spam

    NEW POST ON THE SUBJECT

    Just wanted to give this thread a heads up that I put my response to most of the above comments in a new blog post:

    http://blogs.bnet.com/salesmachine/?p=205

  •  
    38

    ptiseo

    01/04/08 | Report as spam

    Adding Counterpoint

    I realized I was also "just bashing" (although I stand by my opinion, I just wasn't expanding the conversation topic), so I'll also add some counterpoints:

    1) "Marketing should be goaled and compensated on one thing: generating qualified leads."

    No. Because Marketing's purpose is not only "generating leads". That's a simplistic viewpoint all too prevalent in the reductionist mentality that pervades the world of Business.

    There are two main overarching purposes: qualify the market and manage the market.

    In contrast, sales is: qualify the lead and convert the lead.

    Note the different levels of operation.

    Needless to say, from the market comes leads. "Generating leads" is where the crossover happens between Marketing and Sales. IOW, where Marketing punts into Sales. Given that it is one of those "between-departments grey areas", somewhat shared, that's also where little territorial pissing fights happen. For example, cold calling is classically the domain of sales but can be interpreted as "generating leads".

    The true purpose of Marketing is to be in the thoughts of the prospect BEFORE THEY ARE A LEAD and BEFORE SALES TALKS TO THEM. If your company just looks at the number of leads going into Sales, you have not realized the true function of Marketing in your company. Too many companies, i.e. Sales groups "doing Marketing", think that "lead generation" means purchasing a list of decison makers from some relevant trade association's directory and thinking they've done some "Marketing". That's easy (and necessary), but not Marketing's "higher level" function. A performant Marketing group is working on market research (example of "qualify") and branding (example of "manage"), on top of lead generation.

    For the "qualify" aspect, who's measuring existing customer base behavior and opinion as an aggregate? Who's verifying specific things like search engine position?

    For the "manage" aspect, similar to what SteveRider posted, when a prospect out in the market is doing their thing and then suddenly feel a need ("I need service A or product B"), who's the first company they think of calling? Yours? Your competitior and you're the second, alternate bidder used to negotiate lower costs with the first? Or, do they even think of calling you AT ALL? Who is going to write the PR, the website, the blogs? Who's going to do the evangelizing?

    The sales people? They should be working on closing leads. Otherwise, your sales staff is overloaded, poorly utilized and too generalized. Companies specialize their positions into as few roles as possible to get effective else it is a lack of focus problem.

    And, given that sales is the one receiving that call, AND NOT INITIATING THE NEED, FINDING THE NEED (not the sale, the need) OR DIRECTING IT, why is Mr. James so intent on poo-pooing the existence of a business unit that controls and works on that need?

    2) "what?s the quantitative measure?"

    Again, picking on marketing by using cherry-picked examples using outdated or inappropriate metrics by uneducated marketing groups is like picking on sales departments that have watched Glenngary Glen Ross one too many times.

    Mr. James should do a little footwork and look into real marketing. There are many good metrics to find. Branding is measurable. For instance, measure saliency through surveys. Is it shifting positively? Reward marketeer if all signs point to "yes". Is a campaign to help drive selling of higher-margin product/services actually changing a company's "basket composition"? That's measurable. Look at specific gross sales mix moving more towards those items and profit margin increases. Also, internal metrics like "marketing spend per lead" is important.

    - alphadogg

  •  
    39

    ptiseo

    01/04/08 | Report as spam

    Confused Sales And Marketing

    "Inputs are raw leads generated, outputs are qualified leads flipped to sales."

    Your output is actually a classic sales metric. Looks confused to me. If the company is small, it is common for Sales people to assume Marketing responsabilities because of resource constraints, but the roles need to be kept clean and separated.

    "...marketers should get their butts out of the office and go on sales calls..."

    Never, EVER send marketing folks on a sales call. Keep the sales call focused on selling. In another response, I summarize Marketing's accountabilities as being "qualify the market and manage the market". Doing these things on a sales call confuses the sales call and lengthens the sales cycle.

    If the sale call did not close successfully, apart from post-hoc sales call debriefing for Sales internal use, there needs to be a feedback loop into Marketing (and other groups like Engineering, Product Development, etc...) to understand why the lead did not convert, was the market misunderstood and is there an opportunity to do better. That is effectively why you think that "...I've learned the most from talking to customers after deals that we've lost."

  •  
    40

    FELDMAN3100@...

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Business exists in order to provide the customer with a product that he is willing to buy at a price he is willing to pay, and that price, amplified by the sales volume has to represent a reasonable return on invested capital.

    To paraphrase an old saying; ???Those who can, sell, those who can???t preach??? Too many ???marketing types??? think that they can sit back and tell everyone else that they are not doing their job right.

    Marketing is the management of the relationship between the business and the customer. The marketing department has responsibility for optimizing all aspects of that relationship.

    The salesmen meet with the customer and try to sell the product. The salesman???s experience with the customer; satisfaction, dissatisfaction, wants and needs, provides raw feedback which suggests product tweaking, redesign, or total change, as well as other opportunities for cross-sell, up sell, and new prospects.

    You measure the performance of the marketing department by comparing market share, return on investment, etc with competitors.

    ThankYou,
    Lee Feldman
    Pittsburgh

  •  
    41

    SansMayhem

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    After reading this post several times, I find myself wanting to comment (which I rarely do on blogs)

    The scope of the marketing department is organizational wide - if it's going to be public facing and potentially impact brand, reputation, or sales - it falls to marketing to ensure that certain standards are met.

    The function of marketing in any organization is to help the organization meet objectives. It does this through promoting awareness, fostering image, and generating business. The methods used range from creating industry specific assets that establish the company as a resource in their field to crafting direct marketing campaigns that call people to take action and buy.

    A marketing department that is aligned with corporate objectives serves all areas of the business by:
    ??? Working with sales regularly to determine which campaigns garnered the best results and to tailor future campaigns in collaboration with the sales organization???s goals, ensuring the corporation gets the biggest bang for the bucks spent
    ??? Working with products to ensure that information presented about products is accurate and presented in a manner that entices potential customers to investigate the product's benefits to their organization
    ??? Working with external channel partners to ensure that brand integrity is maintained while still meeting third-party partnership objectives
    ??? And working with internal channels to ensure that employees are kept informed in a consistent manner

    For marketing to be effective, it has no choice but to be collaborative. How could anyone in the marketing department hope to stay employed if the work they do does not help the C-Suite meet the organization's objectives?

    Yes, it is difficult to draw direct correlations between daily activities and results - marketing is a creative element and daily activities reflect that - but that does not mean there is no standard of measurement to validate marketing's purpose and budget. No CEO would give marketing a budget and then not expect to see ROI and to have that ROI proven through some metrics. Just because you cannot apply a straightforward formula of causality to marketing???s activities does not mean they are not measured or quantified.

    Speaking as a marketing person, I can tell you one of the biggest points of frustration in any marketing department is how difficult it is to draw direct and clearly visible correlations between a campaign and the response ??? but as difficult as it is, we measure response ??? because without analyzing key indicators to prove ROI we have no way of making educated decisions on what???s working and what isn???t.

    To say marketing is fluff speaks volumes about the lack of knowledge of exactly what marketing does, how they do it, and what their value is to an organization.

    Try putting a company's latest product out there without marketing - without the kind of promotion marketing does, the new product could cure cancer and the world wouldn't know it - it would be just another item on a list.

    Marketing is the most far-reaching method of disseminating the information the company wants the public to know is a manner the company wants it known ??? all with the goal of maintaining and growing the organization through the generation business.

    If that???s not an integral element of business success, I don???t know what is.

    Just my two cents - take it or leave it.

    G

  •  
    42

    imaglin@...

    01/04/08 | Report as spam

    RE: Why Marketing Wastes Money.

    The ultimate measurement of all marketing activities is the turnover and profit margin, as well as the number of repeat customers, product returns and customer complaints. If marketing actually designed a good product, with a good campaign, then the product would move from introduction to growth to maturity in a short time. If not, then they didn't do a good job. Yea, yea, thats called R&D and A&P, so what? They're labels, they're part of the same process. Finding out why a product is successful or not after it has entered the market also is part of marketing (or it should be). So there are more measurements for you, i.e. customer feedback. How to get all this info is part of the Marketing Strategy. Of course, if all of this is not in existence, then, and only then, Marketing wastes money.

  •  
    43

    Geoffrey James, Sales Machine

    01/05/08 | Report as spam

    Exactly.

    Well put.

  •  
    44

    An Expat in France

    01/05/08 | Report as spam

    Take of The Blinders... (reposted on request)

    For the most part, this is spot-on, but I take issue with a few of the basic assumptions/premises of the article.

    Most of those who think that Marketing's only function should be lead generation probably equate "marketing" with "advertising" or developing sales promotions. If this is your interpretation, then your experience with marketing professionals is different than mine.

    Google notwithstanding, companies have limited resources - financial and human. Part (in fact MOST) of marketing's function is to help (repeat "help") make decisions about what constitutes a good 'business' opportunity, and how best to apply those resources in order to exploit that opportunity. (I emphasize "business" opportunity, as opposed to "sales" opportunity.)

    As a marketing manager, I have taken the heat from many, many sales managers who tell me what their challenges are, and how they think we could address them. I am fortunate enough to work with some highly competent professionals who understand that theirs is not the only customer group on the company's radar screen. Sales organizations are motivated, managed and rewarded for their ability to penetrate a particular territory, vertical market or account list, and their perspective is understandably oriented toward that area of responsibility.

    What's more, in the wake of corporate decisions to diversify product and service portfolios, sales teams being asked to shoulder more and more responsibility for account management - in order to maximize the revenue per customer and prevent competitors from gaining a foothold in a customer account. So it should come as no surprise that territory/industry sales managers - whose performance reviews are primarily based on revenue, by the way - are going to be more focused on how to satisfy the customers in their particular hunting patch than on the global picture.

    To their credit, the Sales professionals provide valuable feedback in product development and competitive positioning, but decisions that take months to implement, and which must be balanced against other priorities, have to be taken by someone/some group that is thinking toward a longer time-horizon than the quarterly (or even monthly) view that most Sales organizations are prone to do.

    Sales and Marketing go hand-in-hand, as they should. But teamwork and collaboration is what leads to success - not turf wars and mud-slinging. This is the face of Marketing in a mid- or large-cap company; Marketing (with input from sales, engineering, support, etc...) plays a role in determining who is targeted, and how they should be targeted. To be sure, some people who call themselves Marketers aren't up to the challenge, but let's not minimize the value of what it is that truly talented Marketing professionals do.

    But if you insist on continuing to demean the Marketing profession, where is your argument for the transactional sales person? e.g.: Someone who treats the customer as a piggy bank, and is only focused on this month's opportunities?

    The engineering teams I have worked with are grateful that they don't have to deal with the customers who request a 100% customized product while demanding an off-the-shelf delivery schedule. And I know that sales teams are often put in difficult situations when they have to overcome customer objections; or occasionally have to walk away from a deal. But the professionals I work with recognize that while Mass Customization is a great concept, you simply cannot promise to deliver 6.2 billion different flavors of ice cream without the incumbent delays in engineering, supply chain, customer satisfaction and support issues.

  •  
    45

    srayfield@...

    01/06/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Nice try but too narrow
    Geoffrey

    This is the typical sales response focused on me, me, me.

    There are dozens of ways that marketing adds to the bottom line that can be measured beyond the key item you seem narrowly focused on.

    For example if marketing increases the awareness level for a particular product or service this can increase sales. The awareness level can be measure. The increase in sales might come from a reduction in the number of calls required to make a sale.

    Let???s build on just this one aspect. If it take 7 calls to make a sale and a call cost $400, then the sales cycle is $2,800. If increase awareness reduces that cycle by one call we reduce the cost by $400. If we have 200 sales people we have saved $80,000. If we do that 10 times we just freed up $800,000 to reinvest. Where do we reinvest ??? let???s ask Marketing!

    Stephen Rayfield
    Marketing knowledge Mentor

  •  
    46

    Geoffrey James, Sales Machine

    01/06/08 | Report as spam

    Cost of Sales

    Unless, of course, you spent $1 million to generate that awareness, in which case you just lost $200,000.

    And you don't explain how you're going to prove that the lower cost of sales actually was tied to the $1 million you spent.

    Maybe the faster close rate was the rest of a $20,000 sales training course. If so, then you just lost the company $1 million.

    It never ceases to astound me how so many marketing people can be so adverse to having their activities measured -- and then being compensated on those measurement.

    Instead, we get this kind of fuzzy thinking that simply assumes that whatever marketing does to "raise awareness" is actually having an impact.

    Give me a break.

  •  
    47

    G&Gboy

    01/07/08 | Report as spam

    RE: Why Marketing Wastes Money.

    The anger in the article and in the comments is palpable. Why?

    I'm in another field (industrial design) that has, from time to time, been criticized for its inability to "quantify" value to the bottom line. But my company realizes the value of my efforts without an excel spreadsheet. The reason seems to be that my lack of concern for evaluating my contribution, quantitatively, allows me to think beyond and reveal possibilities that the "valuable" functions of engineering, manufacturing and sales are too busy to consider. I understand measurement but if you can quantify "it", "that" and "this" then you are measuring what already exists as a feature, product or service. That???s regressive. Marketing, design and advertising are progressive features of the organization that appeal to the consumers emotional brain; the yet to be quantified 80% of judgment that makes people buy, go into debt and respond to internet blogs.

    Companies would love to get into consumers heads but I doubt that exercise would yield firm quantitative direction. I suspect that you are angry that marketing professionals can't prove (directly correlate) that their ideas make money for the company. I could also argue that sales, manufacturing and engineering will have a hard time clearly delineating how much of the credit (or blame) they deserve in a company???s performance. This is due in no small part to the consumer brain which may be processing "value" but is not assigning, in spreadsheet form, an attribute that would go to one business function or another.

    Finally, I've learned that those who control the spreadsheet, enter the numbers and regularly revisit the cost to benefit analysis are the people who come out looking the best. This happens for one reason; you can make data say anything (I learned that from a statistician). And it is just human nature (that pesky emotional brain again) that drives the number cruncher to make the data work for them.

  •  
    48

    Publisher1

    01/09/08 | Report as spam

    RE: Why Marketing Wastes Money.

    I see the point here, but think you are missing the key element that, done right, marketing is NOT about just bringing in the sales, but relates the entire client experience, as advocated by Steve Yastrow in Brand Haromony. How your employees return calls, how the actual product/service is delivered are as important to marketing as bringing in the original sales lead.
    If you are thinking of marketing purely as a front end process, you are right, if you are thinking of it in an integrated total brand experience you are missing the most important thing about effective marketing.
    See this posting, for examaple: http://constructionmarketingideas.blogspot.com/2008/01/blog-post.html

  •  
    49

    tpgaynor

    01/21/08 | Report as spam

    RE: Why Marketing Wastes Money.

    Dah!?!

    hard to believe companies ignore sales 101, pay for performance.
    T

  •  
    50

    yesdog9320

    02/09/09 | Report as spam

    RE: Why Marketing Wastes Money.

    I have worked in marketing departments for many years. I embrace the concepts and ideas of marketing and appreciate the contributions. However, I do agree that many marketing departments do waste money. I have seen in many cases where new product lines are added and after 3 or 4 years the line is being evaluated for removal from the market place.

    As I have been reading, many marketing functions aren?t or can?t be measured for efficiency or effectiveness. In one case, based on my own experience, new product forecasts were never compared to the actual results. A product line forecasted to sell over a million dollars annually never reached a quarter of the anticipated revenue. The waste includes all the expenses to bring the product to market. Of course there are tangible costs such as catalogs and collateral production. Not so tangible is the time and energy the sales force wasted promoting a product that most customers didn?t want. There is the time and effort for the distribution system to stock the product. The biggest cost is the money tied up in inventory, money that could be spent on product that generates long-term profit. Don?t forget the time wasted in meetings developing recovery strategies. There was no accountability for missing a forecast. This is one of many instances why marketing wastes money.

    Michael

Please add your comment:

  1. You are currently: a Guest |
  2.  

Basic HTML tags that work in comments are: bold (<b></b>), italic (<i></i>), underline (<u></u>), and hyperlink (<a href></a)

advertisement

Blogger Profiles

  • Blogger Thumbnail Geoffrey James Geoffrey James has sold and written hundreds of features, articles and columns for national publications including Wired, Men's Health, Business 2.0, SellingPower, Brand World, Computer Gaming World, CIO, The New York Times and (of course) BNET. He is the author of seven books, including Business Wisdom of the Electronic Elite (translated into seven languages and selected by four book clubs), and The Tao of Programming (widely quoted on the Web as a "canonical book of... more »

advertisement
  • Click Here
  • Click Here
  • Click Here
advertisement
Click Here