We have all heard of the winner’s curse. I see this in action almost every day when I meet various marketing heads. Everyone is just looking at quick wins and I get expectant looks as if I have some magic wand that will just ensure that customers will start buying more, or upgrade or not churn, or continue to stay with the brand.
Various analysis done in the past has shown that a powerful marketing department enhances the firm’s longer-term future total shareholder returns beyond its positive effect on firms’ short-term return on assets (ROA). Then why is it that the focus is almost always on the short term? A study done by CMO threw up some startling numbers.
Source: CMO Survey 2019
The above chart clearly demonstrates almost 70% of the time is spent on managing the present and mind it this is the CMO we are talking about. I tried to deep dive and do an analysis for myself purely from a behavioural point of view. My observations are as follows:
- Strategic thinking has been outsourced: A typical response when a brand is in trouble is – “let’s call a pitch for partners in Analytics, Digital, Advertising and listen to all the ideas”. I can assure you that the most likely partner to get you out of the hole is your current partner. That is if you truly treat her as a partner.
- Huge pressure for short term, immediate results: We live and die by the weekend in retail, that pressure has spread to other businesses. In some cases, the pressure is monthly in some cases it is QSQT (Quarter Se Quarter Tak).
- Lack of clear business KPIs : Very few CMOs will admit it but many of them are unclear about their business KPIs. The next problem is that KPIs cannot only be transactional or immediacy driven.
- Unable to collaborate with cross functional teams: Most marketing teams still operate in silos. Unable to collaborate with Sales, Distribution, Technology and Finance teams. In fact, let me go further and state that they are consciously kept away. It’s a perception issue but one which needs to be addressed by marketers head-on.
- Unable to showcase the impact of marketing: This dials back to the point I made earlier about lack clarity on business KPIs, having a domino impact on effectiveness because what is the benchmark? Marketers need to focus long and hard on this key evaluation parameter and set the expectations right. This will immensely benefit both the marketing team and the organisation.
- Unsure as to how to leverage data: Leading to generate meaningful, actionable insights from a business perspective. Some of them do take the help of partners but most of them are unable to execute programs the way they are supposed to. It is also a fact that they have been handed legacy systems or ad hoc technology platform decisions that impact stitching together the entire story.
Marketing must build brand and business value over the years. Where is the vision for that? The below graphic clearly demonstrates that there have been net leadership losses for Marketers as professionals. From a stock market performance point of view, shockingly the role of marketing leadership comes in last. Marketers need to grab the opportunity thrown by a whirlwind of technological changes and try to steer this ship in their direction.
Marketers need to employ both data driven thinking and behavioural sciences to achieve business growth. It’s not an either-or situation, it requires both sides of the brain to do this winning tango. There is an urgent need for marketing leaders to take cognisance of the future and invest time in it to ensure that the organisation, brand and service survive the test of time.