1
Marketing is broken
In this first chapter we look at the evidence for declaring that âmarketing is brokenâ and how marketing today rarely helps your sales force.
You know the scene
It's painfully familiar. You've just heard that a competitor has won a deal that you were banking on. You'd been marketing to that account for months. Your sales rep had a good relationship with the decision-maker, felt in control of the sales process and you'd submitted a strong proposal. Nothing left to chance. So what happened?
The rep calls the prospect to try and save the deal but it's too late. When you ask why you lost the sale, your prospect says that his team didn't believe your pitch, was unconvinced by your ability to deliver and was unimpressed by your service capability. But didn't they read the proposal? You don't know how or when, but your competitor managed to turn the prospect away from you and towards them. The decision was made before you wrote your proposal.
This is news that you didn't want to hear. You're finding it harder to get prospectsâ attention. You miss out on tenders because you just didn't hear about them in time. But somehow your competitor did. You're invited to tender on bids but you feel you're just making up the numbers. You find out about deals your competitor closed that you didn't even know about. Your lead generation numbers are flagging, and your leads-to-sale conversion rate is down.
You want to apply more science to marketing, because you know much of your spend must be wasted. But you don't know what marketing works and what doesn't. You're doing this year what you've always done, but now it doesn't seem to work.
And the sales director is looking for you. A bad sign.
Look at the situation from the prospect's viewpoint. They are being bombarded by marketing messages from you and your competitors, pitching similar products with similar features at similar prices. Your attempts at differentiation are just adding to the noise. Your prospects are confused and they need someone to help filter the useful information from the background chatter. Who do they turn to? Who do they listen to? Who do they trust?
Marketing is broken. This shouldn't come as news to you. The fact that you're reading this book means that you're interested in marketing, you're curious to discover new marketing approaches and, we assume, you're aware that all is not well.
In the background research for this book, we examined the opinions of a range of experts in marketing, from academics to gurus and practitioners. It is depressingly easy to build a list of statements that confirm that marketing is failing. Here's our list, but you should try making your own:
Chris Anderson cites in
The Long Tail âWe're entering an era of radical change for marketers. Faith in advertising and the institutions that pay for it is waning, while faith in individuals is on the riseâ.
Jim Stengel, global marketing officer for Procter & Gamble ( P&G), said, âToday's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilitiesâ.
Seth Godin, in
Purple Cow, writes âThe traditional approaches (to marketing) are now obsolete. One hundred years of marketing thought are gone. Alternative approaches aren't a novelty - they are all we've got leftâ.
McKinsey & Co. states that âToday's chief marketing officers confront a painful reality: their traditional marketing model is being challenged, and they can foresee a day when it will no longer workâ.
Laura Ramos of Forrester Research writes, âMarketers cling to marketing tactics that they admit fail to work⌠it's time to leave these outmoded methods behindâ.
Thomas Friedman of
The New York Times states âThe new model in business is that you involve your community and customer in an ongoing conversation about every aspect of your businessâ.
Richard Edelman, founder and head of Edelman PR, believes that âtraditional marketing is in its twilight years. (It is premised on) an old model of persuasion that worked from the â50s through the â80sâ.
Professor Philip Kotler, the marketing guru and author of the Harvard Business Review âmust readâ text
Ending the War Between Sales and Marketing, states that the average person âis exposed to several hundred messages a day and is trying to tune out ⌠marketers must consider other methods of getting customersâ attentionâ.
Robert Scoble and Shel Israel, in
Naked Conversations, see âa clear and present danger for practitioners of traditional, unidirectional advertising and marketingâ.
Marketing no longer sells anything
Our starting point for this book is not to reveal that marketing doesn't work very well, but to try and articulate how we think it can be fixed. Our research has shown that, while everybody seems to be aware of the decline in marketing, few do anything about it. The lack of innovation in marketing is ironic, given its supposed creative core.
When we say âmarketing is brokenâ what do we mean? Simply, that it no longer does its job. Marketing is orientated around sales. If it doesn't initiate, assist or close a sale then it is failing. And failing it is. The largest single item on most firmsâ marketing spend is advertising, accounting for between a quarter and three-quarters of budgets. In some industries, marketing accounts for a third of revenues. Yet the link between marketing and consequential revenues is rarely demonstrable. Astonishing.
Marketing is based on notions that are 20 years out of date. The notion that if you put enough messages out there some of them will be heard. The notion that âbuilding the brandâ is money well spent. The notion that people believe what they see and read. Recent initiatives to take advantage of Web 2.0 technologies are merely reactions that apply old techniques to new media. Marketing needs to rethink the messages it is communicating, to whom it's communicated and the methods being used. Many companies are disappointed at the lack of tangible return on their multi-million pounds marketing activities. Advertising remains the largest budget item on most firmsâ marketing plans. Advertising may be a fixture in a company's annual spend, but management boards are increasingly questioning why this is. The most recent Brandchannel survey in 2007 illustrates this point well. Four of the world's five largest brands have never conducted any advertising, and the same is true for seven out of the 10 fastest growing brands. There is no proven causal relationship between advertising and financial performance. And advertising is just the tip of the melting marketing iceberg.
There is no strong evidence to suggest that advertising has any effect on sales. The academic research on marketing and return on investment (ROI) is paltry in number and unconvincing in conclusion. There is an awful lot of assertion from the profession itself, and several claims to the link between brand and revenues or stock price. It is true that firms with big revenues and profits usually have well-known brands. Yet brand awareness could equally be an outcome of high sales, rather than a driver of it. Google has never advertised, yet it has become the world's most powerful brand.
There exists in most companies a disconnect between sales and marketing. This manifests itself at an operational level in departmental warfare where, according to marketing guru Philip Kotler, âsales forces and marketers feud like Capulets and Montagues - with disastrous resultsâ. If you haven't heard Philip's 30-min audio download of Ending the War between Sales and Marketing then we'd suggest you do.
Inside almost every company there lies a gulf between marketing and sales. Rarely is there harmony, at best just an agreement to silently walk past on opposite sides of the corridor. At worst, it can totally paralyse an organisation. Separate territories, with neither able to see the other's viewpoint.
Recent trends in marketing - the move online, campaign management systems, the creation of brand personalities - have done nothing to bring the two divisions closer.
Continuing disillusionment with traditional marketing and its dubious returns are leading many organisations to question how, or if, to continue with their current marketing levels. Marketing executives are under pressure to show results, ones that will impress the management team. There has never been so much interest and activity in marketing performance metrics and dashboards. While this focus on measurement is encouraging, most metrics concentrate on monitoring the effectiveness of the marketing operation, how well it does what it does, rather than the marketing execution. Does marketing result in more leads, more sales? The answer, across industries and geographies, is typically âWe have no ideaâ.
Is anybody there?
If the paucity of tangible and reliable ROI metrics from marketing, across all industries and geographies, suggests how marketing is broken, it begs the question: why is it broken? Why does marketing not deliver higher sales or better lead generation?
The answer is that nobody is listening anymore. By the time you go to bed tonight you'll have seen roughly 1000 commercial messages. There are just too many to remember, so they're all ignored. TV advertisers reckon they need to show an advert between 7 and 10 times before the audience can recall seeing it, and even then they don't necessarily remember what it was advertising - âYes I remember the house with the rubber floor but no, I can't remember which beer it was advertisingâ.
Besides the sheer volume of messages bombarding us everyday, have you noticed that they all sound the same? A consistent theme in marketing literature is the blandness of messages. Advertising is the price for being dull - you have to pay to get people to listen to you.
There is a chronic lack of marketing innovation in the technology industry. Compare your core message with that of your competitorsâ. Your product is easy-to-use, fast, leading-edge, proven, customisable, flexible, scalable and available in mauve. Welcome to the club. Part of the problem is the unsustainability of competitive advantage, due to the rapid transmission of ideas and technical capability. Your competitors can deliver a similar product 6 months after you innovate. If you work in a service-based industry your competitors can clone your offer by tomorrow.
There's also a problem in the way that marketers talk. Imagine you're at a party. A man comes up to you, but instead of introducing himself, he yanks your head back, pulls your jaw down and looks at your teeth. âI'M A DENTIST!â he explains.
That how marketing sounds. It's one way. It's abrupt. It has no concept that the listener may not want to hear the message. It lacks social graces. It intrudes, by demanding your attention. There are no pleasantries. There's no engagement with the listener. It's what Seth Godin aptly calls interruption marketing.
In fact, it doesn't really matter if you're heard above the noise or if your message is innovative and relevant. Because your prospects don't believe you. You're selling something, which means you're biased. Prospects may like your message but they want to hear it from someone they trust.
We've decided to decide in a different way
A decade ago decision-makers used two types of sources to influence their opinions and agenda. The first was the printed media, either the general business press or industry-specific trade press. These covered current trends, macro-economic reports and experiences from the field. The second source was industry analysts, used heavily in the technology and telecoms sectors, but also appearing in retail, banking, manufacturing, pharmaceuticals and others. Together journalists and analysts made up the bulk of influencers on business decision-makers.
Our own research has tracked the continued decline in share of influence amongst journalists and analysts between 2003 and 2007 ( Figure 1.1). The research begs a key question: if journalists and analysts are diminishing in their share of influence, who is replacing them?
The answer is that decision-makers use a wide variety of influencers to inform their judgments, from inception to implementation. We've identified over 20 different categories of influencer and they may play a number of different roles throughout a decision process. For any one decision, there could be a dozen or more individual influencers involved at some level. In a market there are typically hundreds of people exerting their influence.
Figure 1.1 Journalist and analyst share of influence is declining
But marketing has not kept in line with this trend. The vast majority of marketing activity with influencers is still founded on PR (public relations) and AR (analyst relations). Our research suggests that, instead of devising programmes that target journalists and analysts and ignoring the remaining 15 per cent or so of miscellaneous influencers, as you could have done 10 years ago, you would now be missing out...