Does Marketing Matter?

by Martha Hess

The marketing function is critical for materializing an organization's business objectives yet its utility is often under question due to the perception that marketing is an inexplicable, low-ROI activity which is often relegated to a sales support role. The result is a great deal of unrealized business value that is left fallow while CEOs wrestle the weighty challenges of improving their marketplace performance.

Growth Tops List of CEO Concerns

In the 2006 Conference Board CEO Challenge Survey, U.S. CEOs of companies with less than $100 million in revenues identified:

• Sustained and steady top-line growth as their #1 concern
• Customer loyalty and retention as their #3 concern which has consistently been in the top for all six years since the CEO challenge survey began

CEOs' perception that marketing isn't working is not surprising -- they see their company spending more on marketing and accomplishing less. One reason may be that they are spending those marketing dollars on outdated, ineffective practices like:

• Equating marketing with selling
• Emphasizing customer acquisition rather than customer nurturing
• Viewing customers as business transactions rather than managing customer lifetime value

To affect their top line and to retain customers, CEOs need to use marketing to understand, create, communicate and deliver value.

Marketing's Role: Fueling Growth

The view that marketing and selling are the same is a common misconception. Marketing is not selling because selling starts long before the company has a product. As Peter Drucker said, "The aim of marketing is to make selling superfluous." With that established what role does marketing play in helping the company grow the top line?

A company must first know where it wants to go. Marketing has the main responsibility of leading the internal effort to identify, evaluate and select market opportunities, and then develop the strategies for achieving leadership in target markets. While marketing bears the responsibility for identifying company growth paths, marketing's main skill is demand generation, namely finding the best methods to influence the market's perceptions about the product or service being offered. How often do you hear salespeople say that the prospects they call on don't know about their company or the products they sell? Leveraging marketing's true role in identifying profitable growth areas, and marketing's true skill in fueling demand, is how you help the make the sales organization more productive.

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