Lots of water-cooler chatter from friends about the last post, specifically the point about the lack of a marketing no-brainer metric. Everyone with boardroom tenure has a metric, from sales to finance to operations to manufacturing. Marketing has to pay cash at the bar with their program specific ROI’s.
Under less-than-scientific scrutiny, though, these patterns of no-brainer metric ownership unravel in gales of confabulation as soon as things aren’t going well.
So in the spirit of progress, let’s take an example and pull it apart so we can see the guts with our own eyes. And where better to start than with the organization’s favorite metric, revenue, and our favorite organizational poster-child, sales.
Entry: “Sales Team = Revenue”
Sound Byte: “If it wasn’t for us, none of you would get paid”
Engineering: “We designed something good”
Manufacturing: “We made something good. And it works. Usually.”
Operations: “We bought enough of the right stuff this time and actually shipped it where you wanted and when you needed it”
Product Management: “We created a product based on what the market actually needed – we should write that down somewhere”
Corporate Marketing: “We created consumer demand for it and for everything else coming out of this blasted company… not that anyone cares…”
Channel Marketing: “We created channel demand and channel readiness for it, and amazingly, you shipped it when you were supposed to so sales can finally stop complaining”
Product Marketing: “We positioned it against other products and against market needs, launched it effectively, and still feel a little pissed off”
Finance: “We priced it too low again – maybe we can raise the prices and not tell sales…”
Competition: “Hellfire and tarnation! Why can’t we ever produce the right product, get enough inventory in our warehouses, and ship on time to our customers? Now Acme Corporation, our arch-nemesis, has our end cap! Dagnabbit!”
And, of course, Sales: “Hey, if we didn’t do our jobs, none of you would have yours”.
Revenue happens when customers buy our stuff. They buy our stuff because they see value in doing so. More than a few people have a hand in making this happen. You can’t throw stones at sales when ‘they make their number’, but their sensitive side comes out when they don’t. “Competition is killing us,” with better products, lower pricing, or with jelly bean colors and a nob we never thought to add. And they may not be wrong. But it does pull back the curtain on how they lack full ownership of the metric they have come to own. They never complain about competition having better account management because this never happens.
Am I being unfair to my friends in sales? Sure, of course I am. I love salespeople. I wouldn’t let my sister date one, of course, but I love them. They are not alone in mistakenly owning a ‘no-brainer metric’. We can do the same exercise with operations, engineering, finance, manufacturing, customer service, and probably facilities, if we tried. Not to mention marketing. But you get the point.
So we demystified the fact that revenue isn’t the sole preserve of sales. And we’ve identified the fact that similar explorations would do the same for other component parts of the company. What’s the big deal?
Marketers should keep measuring ROI’s, testing innovative ideas, scaling good good ones, and pruning bad ones. They should also feel justified in taking credit for their fair share of every ‘no-brainer metric’ the company tracks. And management should have the good sense to figure this out for themselves. Companies that decide marketing has no place at the big table inevitably fail.
The call to action here is not to the CMO’s of the world to find a no-brainer metric – which would be deceptively easy and equally dishonest – but for CMO’s to get wise to the causalities of their businesses and evangelize this with real passion.
So please accept this message in a bottle in the hope that it successfully travels the storm-tossed waves of current self-criticism and finds its way to the shores of executive reason. Or words to that affect.
As always, your friend in communal suffering.
Copyright © 2006 Stephen Denny