Marketers Need to Get Out and Get Under Their Business Models

After a false start when dotcom success was measured by the cash burn rate, reality has resumed and genuine web marketing success stories are starting to roll in.

Google, for example, is brilliant. It will advise you on the most productive keywords for your business, and tell you how many clicks to expect and the conversion rates. Three days later your ad can be up and running. Three hours from then, Google can say how successful it is.

On a smaller scale, Commedia, a small German firm with around 100 employees, persuaded about 5,000 surfers to download music and then used viral marketing to generate 100,000 licences for that music. A 20x amplification is music in the cash box.

ACTION

My theme is not a sudden conversion to e-marketing but a salute to those who are doing old things in new ways. The accent here is on the word 'doing'.

Many large companies have become obsessed with talking about what they might do or what they have done, rather than actually doing anything. Approvals and accountability rule the day, and much of the evenings. Plans, meetings, reports and measurement stretch from dawn to dusk, week to week, month to month: 'I'm sorry Trevor Jones cannot take your call. He's in meetings all day, all week and he's on holiday next week.'

These companies continue to market themselves somehow but their marketers certainly are not doing it.

DYNAMIC MARKETING CAPABILITIES: TIME AND SKILLS

Plans, meetings, reports and measurement take only as much time as real marketers wish to give them.

At London Business School, Nirmalya Kumar and I are developing research into 'Dynamic Marketing Capabilities'. Marketing uses three types of resource: cash, marketer time and marketer skills. The first, cash, has been getting too much attention, and time and skills too little. Small firms become great not because they have plenty of money, but because they have skills and deploy them well in the time available.

Large companies decline because they have plenty of money, about which they fixate, but give too little space for their marketers to roam. Like Scrooge, they sit in counting houses while the world passes them by. On average, British boards give only 10% of their time wondering where their money comes from or how to get more of it. Obvious as it may seem, marketers should get out and market, and not stay indoors playing budgets-and-bureaucrats. Marketing happens in markets. Delegation to a range of agencies is no substitute if it produces more meetings and more confusion. A firm using agencies to deliver the complete marketing mix can dispense with its marketing department.

Yes, some elements of the mix should be delegated. Advertising, PR and promotions need special skills, but for many minor items marketers should just do it. Maybe an agency could have done it better but the administrative on-cost would have delivered a net negative.

Our formal research into Dynamic Marketing Capabilities is just beginning. Our thesis is that better organised, more skilful marketer teams make more money from the same budget, more bang from the same bucks, than most large-company marketing departments.

'JUST DO IT'

At a marketing seminar in Munich in July, I was struck by the stream of successes coming from intuition-fuelled initiatives: no budget, no approval, they just did it. A similar event in Dublin earlier in the year repeatedly told the same story. These initiatives were, at first, small scale. The money had been stolen from other budgets and they would not have harmed their companies much if they had failed.

How feasible is this 'just do it' approach? A large company would disintegrate if everyone started enacting their own ideas without approval or controls. At the same time, it will coagulate if enough people do not get out and do things. And they need to be skilful people.

One of the problems with bureaucratic approval systems is that really creative ideas are the first for the guillotine. Put them down in black type on white paper, and they will indeed be put down. We need a 'Keep Paper White' campaign. PowerPoint is little better. Great creative ideas are obvious only after the event.

Top management should decide who has the skills, what freedom they need to deploy them and how high the stake has to be before approval is needed. Growing Dynamic Marketing Capabilities develops skills and market time, empathising with customers and studying competitors.

UNDERSTANDING THE BUSINESS MODEL

Getting out is the big step but it is not enough. Marketers have to get under their firm's business model, and see what is working and what needs fixing. Any fool can measure the marketing mix, i.e. the budget, and the cash that turns up in the bank account by the end of the year. Any fool can measure ROI, and many do (see 'ROI is dead; now bury it', Admap, September 2004). The difficult part is understanding what connects mix to cash flow. That is what a business model is for. What links marketing actions to changing customer behaviour? These are the moving parts that need to be measured to quantify brand equity.

Some of this can indeed be done in the office. Databases can be mined and old research reports interrogated to discover what metrics predicted what change in profits. The rest of the understanding has to be gained in the market itself. Office-bound marketers should set themselves a target of one field day for every office day as a start. If agencies want to meet, they can buy breakfast before the field trip starts or join the tour.

Unrealistic? Maybe. But not as unrealistic as spending time on the same old plans, meetings, reports and measurement, and expecting results to be different. That's Einstein's definition of insanity.

Money does not matter all that much in marketing; what you do with it does.

This article featured in Market Leader, Autumn 2005.