One of the oddest debates in business recently has revolved around whether or not marketing adds value. It’s odd because without the absolute fundamental of marketing – aligning what the company makes to what its customers want – no company could even survive.
So obvious and basic is this core marketing function that we sometimes forget just how important it is. Without alignment, massive investment produces nothing but waste. Stuff that nobody wants. Look at today’s telecoms debacle, for example.
So there is the “negative benefit” of alignment: avoiding waste. The positive benefit is equally crucial. When a company makes what its customers wants, it forges a powerful mutual win for the two sides. Like wires meeting to form an electrical circuit, the ensuing connection between the two unleashes energy that gets things done. It gets wealth created.
So, given the economic importance of marketing’s core function, why has it come in for so much stick? One reason is that, despite the unarguable benefits of real alignment, many companies still try to do it in reverse: to align what customers want to what they happen to be making. They then look to the communication experts in the marketing department to achieve the impossible task of persuading customers to behave in the “right” way. Finally they blame these poor marketers for being ineffective when they fail.
But there’s a second reason, and it goes right to the heart of the alignment challenge. Truly successful alignment is getting ever more complicated. That’s not only because of new technologies and customer sophistication, but because companies now need to go beyond the functional alignment of supply to demand and embrace the alignment of emotions and values as well as value. Advertising that speaks to the emotions triggered by product usage (kids in clean clothes equals good mother) is a classic example.
Mounting pressure on companies to be good corporate citizens and to demonstrate corporate social responsibility is another. Increasingly, it seems, people want to feel that the organisations they do business with align themselves to their emotions and social concerns, too.
The growing need to include employees in the loop adds to the complexity. In days of yore, employees’ relationship with their employers was pretty similar to buyers’ relationship with sellers: a one-dimensional exchange of money paid for work done. But now, in parallel with the corporate-consumer relationship, companies are finding the need to take this alignment into new dimensions.
Sometimes, these new dimensions revolve around values. In the US, for instance, outdoor sports equipment retailer Patagonia consistently tops surveys of the companies people most want to work for, largely because of its ethics-driven stance of “using business to inspire and implement solutions to the environmental crisis”.
Sometimes, the new alignment revolves around taking a broader view of employee needs. In the US, for example, many companies are introducing corporate concierge services to make employees’ daily lives (such as picking up dry-cleaning) less of a hassle.
In South Africa, meanwhile, grocery retailer PickNPay’s hugely motivated workforce – and superb customer service – has become the envy of its peers worldwide. Staff, it seems, have responded to PickNPay’s determination to build a culture of dignity and respect, its investment of vast sums in training, its
commitment to education (many of its staff are illiterate), and its policy of giving eight per cent of its pre-tax profit to community causes.
Whatever the initiative, such success stories tend to have a common theme: a new form of alignment where employees feel not only that they work for a company, but also that in some important way the company also works for them.
Like moving from two-dimensional draughts to three-dimensional draughts, adding new ingredients such as these to the equation takes us to another level of complexity. The more variables there are, the easier it is to get something out of sync. For instance, employee satisfaction gained at the expense of customer satisfaction (or vice versa) is a disaster. Somehow, the two need to be brought together so that one helps to drive the other. When PickNPay decided to take ordinary staff members – not just managers but cashiers and shelf-stackers – to the Disney Institute in Florida for training in customer service, for example, the employees’ trade union said the money should be spent on housing instead. That would have benefitted the staff, but it wouldn’t have followed through into a palpable win for the company or its customers. That’s the challenge: two-way wins between customers and companies, or employees and companies are not enough. What’s needed is triple alignment: a win-win-win.
Yet there’s more. In marketing’s early days, when concerns were primarily economic, the wins were hidden and implicit. As long as both buyer and seller felt they’d got a good deal from a transaction, everything was hunky-dory.
Today, as we struggle to align value and values for companies, employees and customers, the whole process needs to become much more explicit and transparent. It’s less about take-it-or-leave-it transactions and more about negotiating a complex set of win-win relationships. It’s about reinventing marketing and brands to reach beyond their early focus on unique selling propositions to become “people glues” which bring diverse stakeholders together to create and exchange value – and values.
Faced with the scale of this challenge, it’s not surprising that marketing is sometimes found wanting. Core concepts and tools such as branding, market research and advertising weren’t invented to address these challenges.
Traditional organisational structures aren’t designed to meet them: when staff attitudes and motivation are critical to delivering a brand promise, does it still make sense to divide human resources and marketing into two separate divisions? In addition, we’re still struggling to find robust measurements to calibrate progress.
Yet at root nothing has changed. It’s still all about creating the alignment which avoids waste and unleashes wealth-creating energy. Except this time, those who manage to get it right could make their forebears look positively antique.