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The old sports adage “no pain, no gain” can also be applied to effective marketing management.

As a marketing consultant and professor, I often witness a lack of it.

Marketing management, at least at the majority of hi-tech companies I am a consultant with, has been relegated to communication, advertising and promotion activities. In fact, the only strategic thinking comes at the beginning of each fiscal year when everyone seems to get the strategic bug... or, should I say, strategic religion. "Build buzz, build brand," is the mantra of new wave marketing.

And why should senior management get excited about marketing? Ever witness a marketing planning session when the chief executive asks, "What will I get for the $100,000 ad?" Or, "What percent of new business will this campaign buy me?" When questions like this are asked, you can hear a fly burp....

I know it's hard to convince senior management (I've been there) that the marketing department can produce moneymaking results. But that's what marketing managers need to do if they want to be recognized.

So, how can marketing managers get the respect they think they deserve? Here are five steps. I know this will take work (pain). But once in place, it will transform traditional marketing plans into company strategies (gain).

Step 1: Financial History

Start with product revenue history. Plot annual sales figures on a 40-month timeline. For multiple products, separately plot each product's sales history on individual timelines.

In addition to the sales history, collect and organize by product and year the following information:

  • Average sale size
  • Top 10 accounts by annual revenue
  • Number of annual lost customers
  • Number of special discounts/deviations from standard price
  • Customers grouped by product within segment, market or size

The 40-month sales history is required to accommodate the lag between marketing events, product releases and change to revenue.

Step 2: Marketing History

Plot all major marketing activity across a 36-month timeline. Make sure you plot all the major marketing events launched. At this point, it is not necessary to include the cost of each marketing activity; however, if the data is available, add it to the event listing.

Essentially what you will be doing is looking for patterns of change using the financial figures as the base line.

Step 3: Product History

Next, plot 36 months of product-feature release information. For this you need to see the product manager. Ask for the product feature plans (road maps) for the last three years and the feature plan (unreleased features) for the next 12 months.

The future plan will be used later. As you did in the earlier steps, plot the feature releases across a 36-month timeline, making sure you identify what the major release features were. This piece of historical info is critical for being able to begin testing for trends.

Step 4: Sales History

Similar to the financial, marketing and product history, you need to collect 36 months of sales organization data; however, the data will be organized and processed differently.

The goal of this step is to use the data as enabling information in the final analysis. So, after the information is collected and organized, put it aside for later use. This is the data to be collected:

  • Each year's beginning and ending sales people headcount
  • Annual percent of salespeople turnover
  • Annual percent of salespeople making quota
  • Sales cycle (is it the same each year, or has it changed?)
  • Average sales order for each year

Step 5: External Market Requirements

This step requires the development of a data collection process: i.e., survey, focus group, clinics, customer audits. For this step, I prefer to use a Web-based, real-time survey tool, which allows me to reach more people faster and to crunch the numbers as I'm collecting.

The second tool I find extremely valuable is a market requirement versus constraints matrix tool. By organizing customer requirements using this tool, I will have valuable information organized and processed for future product planning.

Granted, this step will take a lot of effort; but this is where I see most marketing departments failing. In the attempt to get things done fast, critical market requirement data is missed, resulting in costly bad decisions. This is the time to do things right. With the right tools, it doesn't have to take weeks.

Putting It All Together

Using the 40-month financial history as a baseline, overlay the marketing and product history timelines separately. You may have to ratchet the marketing and product timelines to adjust for a 90-120 day lag between event release and revenue change.

As you compare the marketing and product historical data to the sales performance timeline, look for changes in sales performance. Any change up or down should have an associated marketing or product feature release event. Remember that you my have to ratchet the figures to account for a 90-120 day lag in event release dates and sales figures. But there should be change. If there is no change, then begin to look at the sales history info you collected in Step 4. There always is a chance that a marketing event or a product feature release did not make a difference because of sales personnel turnover, lack of training, etc.

Once you have analyzed the marketing and product feature release events against the sales numbers for the same period, it is time for the final step.

Using the external product feature requirements collected through the QFD (quality function deployment) process, compare them to the in-house product feature road map. Determine whether the external market requirements are in line with internal product feature plans.

This last step should shed some light on poor sales performance. Companies often initially release a product with great success only to take their eyes off market-driven requirements, relying too much on technical features to bring in added business. (They sharpen the sword when the market is calling for a saw.)

Granted, this all looks like a lot of work. And it is.

However, to really get to the root cause of poor sales performance, you need to spend the time. New Web-based tools and modeling methods can speed up this process from weeks to days, but they don't erase the steps.

Once you determine the root causes of poor sales performance and put a correction plan put in place, marketing management can claim a role in strategic leadership of the company.

In other words: Endure the pain to make the gain!

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ABOUT THE AUTHOR

Len Gingerella Len Gingerella is clinical professor of entrepreneurial studies at Loyola University Chicago, School of Business Administration. Reach him via lgingerella@luc.edu.

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