June 12, 2009

‘Is Your Marketing Profitable?’

A review of ‘Marketing Payback’ by Robert Shaw and David Merrick for busy Sales Managers.

Is your marketing profitable? A straight-forward question, you might think. But, then again maybe not - perhaps it takes 552 pages written by an eminent professor to illuminate the payback from marketing.

Marketing is 'Untouchable' & 'Slippery'

The authors Robert Shaw and David Merrick tell us that such words as; ‘unaccountable’, ‘untouchable’, ‘expensive’ and ‘slippery’ are commonly used to describe marketing. This grim reality is certain to upset any marketing professional.

Measuring the effectiveness of marketing has been on the agenda for some time. However, when Phillip Kotler - a name known to almost every student of marketing for over quarter of a century - puts his endorsement on the cover of a book about marketing's payback you know the idea is about to become mainstream.

Can Marketing be Trusted with Money?

The authors get quickly to the route of the issue of marketing and its impact, asking questions such as:

• Can marketing be trusted with money?

• Is there a direct link between marketing and business results?

• How should you evaluate your marketing?

These questions are relevant to every business in today’s crowded marketplace.

A New Era of Metrics, Planning, etc.

But what are the answers? For the authors the answer is more science, discipline and rigour across all aspects of marketing, including; brands, promotions and pricing. It also requires more; plans, budgets, metrics and ratios, as well as more evaluation, diagnosis, research and reporting.

In recognition of the increasing movement in this direction, the authors point to the increasingly tangible criteria adopted by the Institute of Advertising Practitioners.

Not content to celebrate creativity and design, attention has turned to measuring campaigns based on additional sales generated (directly and not indirectly).

That is a movement in the right direction, I hear you say, with the authors eager to emphasise that marketing must be measured in terms of the net revenues, or profits generated from its activities.

A Review of the Book

This is a book that everybody in marketing, and many more besides, should read. It contains nothing startling, but a return to the basics of good management.

In this respect, I am happy to overlook any weaknesses in its approach, other than just to list some of them:

• The book adopts a generic approach, as opposed to tailoring its prescriptions to B2B, or B2C in turn. The latter enables organisations to more carefully target marketing and ensure it is sales led.

• It makes the serious mistake, so often made by marketing, of claiming sales (or personal selling) for itself and then allocating it to a lowly position on the marketing spectrum. That it puts personal selling as part of the marketing mix under promotion. Marketing has to be inextricable linked to sales and sales effectiveness.

• There is a strategic dimension to marketing effectiveness – specifically in terms of the choice of markets or segments and the value proposition for the customer. However these are not addressed by the authors.

‘Marketing Payback’ by Robert Shaw and David Merrick, FT, 2005

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