The importance of marketing
It’s tougher than ever before for companies to grow, with marketing increasingly important in helping companies deliver the breakthrough innovation and compelling brand positionings needed to achieve this.
Yet, to convince the Board to invest, marketers need to demonstrate how their marketing strategies will build shareholder value by delivering profitable returns.
Choosing where to play
The main players in a market often have similar resources – both similar levels of money to spend on advertising and innovation as well as similar levels of people available to work on a brand. If all companies spend those resources equally across everything, then they will behave similarly in a ‘mass average’ way and so won’t be distinctive.
To develop marketing strategies that drive shareholder value, marketers need to focus their scarce resources on those areas that will deliver the highest returns. Some companies inherently choose do this, for example:
- P&G focuses its resources on delivering breakthrough innovation, as well as building a strong brand presence.
- Ryan Air drives out cost to offer low-price air travel.
- First Direct invests in its people to build a superior call centre service experience.
- Starbucks invests in building ubiquity on every street corner.
- Zara uses a highly efficient supply chain to keep stock production runs to a minimum.
- Amazon stocks a wide product range supported by fast and reliable delivery every time.
Why engage the Board
Boards have become increasingly interested in where to focus their scarce resources to deliver higher returns. They are increasingly realising that to create growth over and above competitors, they need to cut through the market clutter, by defining what business they are in and what attributes they are and are not investing in to make it customer- centric.
One way to do this is by addressing the questions raised by the ‘5W framework’:
- Who should we target, namely which customers will deliver the greatest return and so should be prioritised for recruitment and retention?
- What should we support, namely which products, brands and geographies will deliver the greatest return – and therefore which should we invest our scarce innovation and communication spend on growing and maximizing?
- Why should we be in business, namely, what are our customers looking for and thus which attributes should we invest in to build a customer-centric business?
- Where should we sell through, namely which distribution channels will enable us to manage and grow our brands as efficiently and effectively as possible?
- When should we engage people, namely, which touch points and communication channels have the greatest influence on our core target audience – and therefore should be prioritized for growth?
How to engage the Board
The Board’s primary objective is to protect and manage the company successfully, so Board members naturally have a mindset that is more analytical, risk-aware and short- to medium-term focused. They are also invariably time-starved, and so need to be able to assimilate new, recommended strategies succinctly and quickly.
Therefore, to engage the Board, marketers need to use thinking, rationale and language that the Board members will understand, with marketing strategies that are:
- Clear, in what they are recommending and why this makes sense to consider.
- Succinct, ideally showing the recommendations in a one-page storyline.
- Robust, supported with a compelling fact base that builds the Board’s confidence.
- Jargon-free, using the Board’s language rather than marketing jargon to make the case.
- Intuitive, in what is being recommended and why this is good for the business.
Marketing is increasingly important in helping companies deliver the breakthrough innovation and compelling brand positionings needed for growth.
To convince the Board to invest, marketers need to engage the Board on where and where not to invest for growth across the 5 Ws, and in turn demonstrate how their marketing strategies will build shareholder value by delivering profitable returns.
Ruth Saunders uses her 30 years of experience as a strategy consultant at McKinsey, marketer at P&G, advertising planner at Saatchi & Saatchi and market researcher at Mars Inc, to help clients be ‘On Point’.
She is a marketing and branding consultant, trainer, speaker and coach.
She is also the author of “Marketing in the Boardroom: Winning the Hearts and Minds of the Board” published by Routledge.
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