​A guest blog post from our November CMO Lunch 'n' Learn presenter Mark Coan....
​A guest blog post from our November CMO Lunch 'n' Learn presenter Mark Coan....

The North Star is located at the fixed point around which the heavens revolve. On the ocean thousands of miles from land, on a spinning globe hurtling through space, early navigators could use this point to help to plot their course and find their way home.

In a landscape transformed by digital, marketeers are increasingly lost. Seen as discretionary, or even worse, totally irrelevant. Shawn of their traditional points of reference I would argue that marketeers today face a similar predicament to those early navigators, far from familiar territory desperately looking for a North Star to find their way home.

I have been very lucky to lead the growth engine for some great companies in the last fifteen years and have had the pleasure to learn from some amazingly talented people in that time. This has given me plenty of opportunity to think about why marketing seems to have lost its way and how it might be able to re-discover its true North.

Based on this I’ve hit upon 3 themes for this post.

  1. Where are marketeers currently headed?
  2. What headwinds do they face?
  3. How do marketeers find their true North?

​Where are marketeers currently headed?
​Where are marketeers currently headed?

First I'm going to take you back to marketing 101, to find a common language for marketeers of all vintages. We all know the classic '4ps of marketing', and using these, I would like you to think about what do you actually spend your time as a marketeer?

According to the authors of Barta & Barwise, in their excellent book 'The 12 powers of a Marketing Leader', 32% of marketeers spend their time on price, 38% on place, 56% on product and by far the majority, 77% of marketeers spend their time on promotion.

Now i’d like you to think about what CEO’s believe is the most & the least important aspects of marketing? Can you guess what’s coming?

According to recent research conducted by the Mannheim University, CEO’s across Europe believe promotion is actually the least important aspect of marketing & price the most.The exact opposite of what marketeers are focussed on. In fact, according the the Economist Business Intelligence unit the majority of CEO’s (54%) believe their marketing departments are not actually aligned to their overarching business strategy.

​The headwinds facing marketeers
​The headwinds facing marketeers

This is a significant mis-match and has serious consequences for the marketing industry. In a world where CMO's are busy zigging when their CEO are busy zagging, marketing is becoming increasingly marginalised and starved of investment.

In my twenty years in the C Suite I have observed many occasions where peers and CEOs have physically flinched under the onslaught of an enthusiastic marketeer's presentation peppered with the latest in marketing jargon. Phrases like 'brand custodian', 'customer insight', 'compelling creative', 'sponsorship activation' , 'through the line', etc.. can appear naive/childish to senior management and are a real turn off to executives grappling with running a P&L.

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Reflecting on why this is, i’ve concluded that CMO’s and the rest of the C-Suite inhabit two very different worlds.

CMO’s grow up in the world of customer value, thinking about brand, insight, customer lifecycle, creative etc...

Most CEO’s don’t. They grow up in a world of shareholder value, P&L management, process and cost control. Both worlds are equally important. CMO's and CEO's are fluent in the language and customs of their own world, but when the two worlds collide, it gets a little messy.

​In my view marketeers today have 2 choices
​In my view marketeers today have 2 choices

1) Continue to complain about it and continue to get nowhere.

2) Get over it and start to act as a translator between the two worlds.

When the stars align

If you have ever looked up and tried to locate the North Star, it isn't that easy to find. It isn't a particularly bright or indeed interesting star. It is the quality of being fixed that makes the North Star unique and important. Located at the exact position where the axis of the earth's rotation intersects with the sky.

In my experience successful marketeers always operate at the intersection between customer & shareholder Value. Like finding the real North Star this is hard and requires constant re-calibration. However, just as the early navigators steered to the point where the axis of the earth's rotation intersected with the sky, this is the fixed point around which marketeers should revolve to successfully act as a bridge between the two worlds. Its true North Star.

How can marketeers find their true North
How can marketeers find their true North

Firstly, marketeers should re-orientate themselves to tackle the big shareholder issues head on and directly relate marketing levers to bottom line increase in profit. What issue is keeping your CEO awake at night and how can you use the full 4Ps of marketing to help resolve it?

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I've found the 'customer benefit to profit' schematic shown here, is a handy way to translate from customer value to shareholder value. Through this lens a couple of key principles emerge.

1) Build customer benefit, but only where it sustainably grows profit, In digital markets this often means product UX wins out over traditional brand building.

2) Turn that customer benefit into revenue, by optimising pricing. Again in digital this often means smart subscription based pricing portfolios are where you need to spend a lot of your time.

3) Focus investment where it drives the highest profit growth. Is this promotion, price, product or place? In scaling digital businesses where the web is the primary distribution 'place', this often means smart customer on-boarding to minimise unitary cost of acquisition rather than 'Above The Line' marketing spend.

In a nutshell, marketeers should move away from their 'marcom' comfort zone, to use the full 4p tool kit to deliver solutions to bottom line issues.

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Simple models like the acquisition funnel shown here, may cause sophisticated marketeers to roll their eyes, but they allow the marketeer to link what they do directly to business results.

Some of the biggest companies in the world like Sky & Ford use these models in this way and I personally used them to great effect in my stints at both Virgin & PTSB.

Marketeers need to develop simple understandable models to link customer and P&L outcomes, in my experience they really work with CEO's & CFO's.

Key takeaways

Marketing is increasingly marginalised at the top table and needs to put itself at the intersection of customer & shareholder value to become relevant again. Too many marketeers are distracted by new exciting bright shiny things that take them away from their true North. This is aligning their effort to solving central shareholder value issues using the full marketing tool kit. Marketeers can help achieve alignment by developing

  • 'Full 4p' strategies that drive bottom line profit
  • Simple models to link customer and P&L outcomes

If you take anything away from this post, it is that by navigating towards the intersection of customer & shareholder value. Marketeers can re-align with the goals of the organisation and put marketing successfully back on course.

By the way, if you want to find the real North Star, simply look up and find 'The Big Dipper'. Then position the bottom of your right fist, on top of the star on the front edge of the bowl and place your left fist on top of your right.

The faint unremarkable blue star hovering over your left hand, is Polaris the North Star, the point around which whole of creation revolves. Walk toward it and you are heading due North.

Our next CMO Lunch 'n' Learn will be Kenny Jacobs of Ryanair
Our next CMO Lunch 'n' Learn will be Kenny Jacobs of Ryanair
Invites will be sent to agency MDs in the next few weeks...