HOW TO IMPROVE MARKETING ROI:
INTEGRATE MANAGEMENT SILOS AND RESTORE TRUST
TO MARKETING COMMUNICATIONS
By Gary W. Kullberg
CEO, Kullberg Consulting Group
Ever wonder why marketing ROI has become such a hot topic?
Perhaps it is related to the record number of 1,478 U.S. Chief Executive Officers (CEO’s) – from all types of companies – who left their positions in 2006, nearly 200 more than in 2005 and the highest level of departures since 2000.
Or maybe it’s because the average tenure of Chief Marketing Officers (CMO’s) or Sales Directors is now only 23 months declining for the third straight year.
Also playing a role is the fact that from 2000 through 2005, marketing communications agencies (advertising, media, direct mail, public relations, graphic design and research) lost 89,700 jobs, or 15.1 percent of the industry.
What’s going on, and how does it get fixed?
Break Down the Management Silos
Ultimately, repair starts at the top with the boards of directors. Corporate Boards have placed enormous pressure on CEO’s, imposing tighter governance and allowing for a much shorter window to improve ROI.
A recent report from Challenger, Gray and Christmas not only verified the significant increase in turnover of CEO’s (1,478 in 2006 vs. 663 in 2004), but also concluded that there were no signs of it slowing. In fact, CEO departures are expected to rise to over 1,600 in 2007, a record for the third straight year.
Challenger also said he sees a shift “toward more growth-oriented sales and marketing CEO’S”. The reason – pressure from boards to show improvement to the bottom line.
CEO’s have, in turn, pushed the pressure down the line and have replaced CMO’s left and right. Why? Among other reasons, while marketing and marketing communications are disciplines that take years to learn, it is apparent that many in the C-suite think marketing is really just “common sense”.
More insight into this issue was provided by Spencer Stuart who surveyed 278 marketing, sales and management executives. Not only did the survey find CEO’s falling short in working with CMO’s, but the second and third most frequently mentioned problems assimilating marketing into an organization were shortage of good talent (29%) and lack of trust and credibility (28%). (Too few resources, at 56%, was considered the top problem.)
Meanwhile, two other corporate silos – Marketing and Sales – not the best of friends during even good times, generally have less than two years to get their jobs done. An all too frequent scenario finds Marketing asking what’s happened with the branding initiatives they developed, and the resulting sales leads, while Sales is asking for more qualified leads even though they are short staffed and can barely keep up with day-to-day activity.
Ultimately, the real issue among these silos – Management, Marketing and Sales – is trust. Yet trusting the other disciplines to deliver on time, on budget, with terrific strategy and execution, seems to have become a medieval concept.
Marcom Companies – Suppliers or Partners?
Sitting at the bottom of this corporate “Chain of Silos” are even more silos within the marcom companies. With dramatic client budget cutbacks, their expanding branch office overheads, and the largest account shifts in history, is there any reason to wonder why 90,000 people have been cut from this industry?
And, in most cases, that leaves inexperienced, rapidly promoted, less expensive juniors developing, presenting and executing multi-million dollar marketing communications programs. Logically, they barely know their own discipline; more important, they have no sense of the strengths of other disciplines, much less how to integrate them to the benefit of their clients.
This must affect their counsel. Can they provide media neutral advice? Job security forbids it. The properly trained talent pool that can provide sophisticated, effective and unbiased advice has evaporated. Trust? Certainly not from clients who know much more than they do at marketing communications briefings. Partnerships, and candor, cannot exist in this environment.
Marketing Consulting Services to the Rescue?
Last year, Advertising Age reported some very positive news: marketing consulting services, between 2000 and 2005, increased by 38% to 120,000 jobs. Generally, these consultants have talent, aren’t burdened with excessive overhead or layers of approval and, most important for the corporation once the decision is made to go outside for counsel, possess experience.
The obvious question then becomes which marketing consulting services firms to choose? Clients would do well to look to the senior level, established marketing consulting services that have worked out the start up kinks and, most important, are capable of integrating as many different marketing communications disciplines as needed to do the job at hand. Ideally, they would have no vested interest in “selling” one discipline over another.
These company names may not play well on the golf course, but your chance of finding real teamwork and partnership should improve dramatically. And so too should your marketing communications strategy and execution.
Look for candor and integrated resources. These attributes can break down the barriers between the Silos and get people working together again and, most importantly, improve your marketing ROI.
* * * * *
Gary Kullberg founded and manages the thirteen year old Kullberg Consulting Group. He is a well respected marketing and marketing communications professional, who has practiced his craft in New York, and now Rhode Island, for over thirty years.
The Kullberg Consulting Group is a strategic alliance of sixty entrepreneurially driven companies, representing all disciplines of marketing communications and sales, with combined experience working with over 585 companies in 21 major industry groups.
He can be reached at Gary@KullbergConsultingGroup.com or 401.886.5001.