CEO: Marketing is Not Advertising
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CEO: Marketing is Not Advertising
It is December in Pittsburgh, and still there is no snow. But this is not stopping shoppers from doing their holiday dance, and keeping the spirit of giving alive. Heck – even the credit card companies are in a no interest until the New Year kind of mood. As I walked through downtown yesterday I enjoyed watching husbands and wives, brothers and sisters, and grandfathers and grandmothers all advertising their favorites retailers as they carried bags under both arms to their cars from Saks Fifth Avenue, Barnes and Noble, and Victoria’s Secret to name a few. Actually, given the sheer amount of presents some of these folks were laboring to get home it is probably a good thing that it hasn’t snowed. Yes, I smiled to myself “Advertising is all around us.” Tis the season after all…and we as Americans must maintain our role in the new global market place as the dutiful consumer of goods – even it we must take out a home equity loan, and use our homes as ATM machines to do it!
But I guess if the consumer does not buy it, then the seller cannot sell it. And this little truism is about where Business to Consumer marketing and Business to Business marketing begin to split apart in how they should be approached. Business to Consumer marketing and Business to Business marketing are totally different animals, and since most businesses in this country have less than 100 employees, both business owners and business schools should do a better job of educating themselves and their students of these important distinctions which go far beyond the scope of this article. (If you have an MBA, then you likely know a lot more about how to market products for IBM, than how to successfully market a $2 M custom manufacturing company. Yet, it is inside of small business where most of our nation’s millionaires are made).
Sadly, many small business owners under $50 M are not doing very well in marketing their businesses, and so reaching that millionaire status is either delayed until they sell their business, or, if they are unable to negotiate such a successful exit, the status never really comes. As a result, all their business was able to supply them for all of the risks they took on over a number of years was a job with an income that in many cases is actually less than what they probably could have earned working for someone else over that same time frame.
It is sad to watch these entrepreneurs taking risks, and re-investing in their businesses to try and grow them when the programs that they are investing in are ineffectual by design, and never could have worked to grow their business. Yet, it continues to happen, and like many things it can be avoided with a little bit of education.
Unfortunately, I don’t think there is a corporate function where you will see more money wasted on program investments that return poorly than the marketing function. This is unfortunate because marketing should be supplying leverage to your business. It should be helping you sell more of your products and services more easily. Instead, you are putting money into marketing programs, and watching it go right up the chimney in smoke. Don’t feel too bad, because this problem is systemic from the top down – CEOs of much larger businesses are just as frustrated with an inability to measure marketing’s performance and impact on sales as you are. In fact, since New Year’s resolutions that might cause one to bite the tongue are still 2 weeks away I am willing to suggest that most corporate marketing executive’s offices should probably just be filled with surfboards for all of the leverage they are measurably driving into the business with their high level ideas, programs, and power points. (Hey CEOs if you were wondering what to get your marketing director for the holidays – there’s an idea!).
But it is a heck of a lot easier for big business to absorb a $1 M goof, than for a small business to absorb a $10-$250,000 one. After all, in the first case the decision-makers go surfing because they are playing with someone else’s money, but in the second case the business owner is on the hook for the decisions they are making. The money either winds up in their business (their pocket), or in the market (another’s pocket).
And while it is a systemic problem grown from a failure of industry leaders to approach marketing by silo, and specialization, as opposed to by function, and passing bad habits down to the private sector – I can’t let the private business owners totally off the hook for preferring to be duped into branding to feel like something is happening as opposed to really doing the work of solving the problem of getting marketing to activate sales.
The reality is simply that many private business owners have not taken the time to educate themselves about what marketing is, and what it should be doing for them, and for those that have – they have not started with a good and accurate definition of marketing – and so they get very far off track very fast, putting dollars into a customer listening survey, or name change, or a logo re-design that in the end is tied to nothing concrete. Why does this happen?
Many CEOs of private B2B businesses confuse marketing with advertising and branding which are actually just very narrow components of marketing. As a result, they say things like “We’re investing in marketing! Look at our new brochure. Listen to our radio spot. Or check out the press release on our new website.” Well, I guess if your sales team is getting tons of inquiries from people who are pre-qualified to buy your products, and services from your brochure, and website, then I guess you have got me. But if you are like most of the CEO’s I talk to and work with, then you are actually getting almost no activity – though you feel like they are basically good and necessary things to do. And you are right. They are a cost of being in the game and operating your sales process. But they will never win you the game by themselves. You need better ways to activate your sales process.
But for most businesses selling to other businesses, traditional branding channels that work well for mega retailers (such as billboards, radio ads, and magazine ads), are very bad ways to spend your marketing dollars. E.g. They will not work. E.g. You will lose money. E.g. You will become angry. And then, you will stop spending money on the very function that could double the size of you business if you actually took some time to understand it, and then rolled up your sleeves to do the work.
Instead, you turn to your ad agency, and toss out that all too human request – “Lie to me! Tell me it will work. I will believe you so I don’t have to think about it.” And so they do. And you are happy…for awhile. Hypnotized…
Then you see your financial reports and your languishing sales pipeline. How did this happen? We will miss plan by 60%! Your cold shower has awakened you to the same harsh reality that will never go away until you solve it! Marketing is not advertising. If you put more money into the market than you take out – you are not marketing. You are losing money. (You may still be advertising though – making money is not a prerequisite to these activities).
Your marketing strategy in a really important way actually is your business strategy. Advertising is a tactical way to progress toward your strategic objective – the customer. But as terrain changes, tactics must change. And advertising and branding in the traditional sense is not a good way to win business in the B2B terrain.
Here’s an easy exercise. Next time you are driving around town – look at all of the billboards, and see how many are for businesses. Then of those billboards for businesses ask yourself how many are for ad agencies? If the above branding approaches worked so well in a B2B model why doesn’t every ad agency in town win your business through these channels with their branding ads? Because their sales, just like yours, depend on strong relationships that have to begin somehow - typically via word of mouth, networking, or cold calling. So that is where your agency is spending their time, energy, and money. When you think about it, the only sales you are really positively impacting by engaging them are the agencies – not yours!
The way that a giant retailer approaches marketing to customers is very similar in theory to how an architectural firm approaches marketing to its customers. In other words, both companies are trying to zero in on what their customers need, and figure out better ways to build a promise that meets that need, and fulfill on it. But the practice of how these decisions get acted on is totally different. Business owners of companies with less than 100 employees who want more leverage from marketing need to understand this, and then they will be in a much better position to make marketing investments in B2B programs that can work to grow their business.
Start by asking yourself “What do I want my marketing to do?” Do I want a brand more than I want sales? If the answer is no, and you want to grow sales in a leveraged way, then good marketing questions to ask yourself and your team are:
Who are our ideal customers?
How much revenue do these customers bring us over time?
How much of these dollars is available to invest in winning more customers like this?
Where are all of the rest of the people like this who are not buying from us?
How can we invest in programs that will begin a relationship with these people in a way that will measurably activate our sales process?
How will we measure and report impact of marketing programs dollars on inquiry, lead, appointment, presentation, proposal, and sale levels?
What is the average time it takes to move a relationship from inquiry to sale?
How far do we need to take it?
If you can answer these questions you are well on your way to making much better marketing investments that will bring you a measurable ROI. And by the way…if you win 30-50% of the sales in your addressable market – people are going to know your brand!
CEO Marketing is Not Advertising - To learn more about this author, visit Michelangelo Celli's Website.
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