Often marketing is viewed as a necessary evil, a cost of doing business. Tangible outcomes aren’t easily understood and budgets are arbitrarily allocated. Practitioners often “go with their gut” or plan using rules of thumb that are passed down from one generation to the next. Furthermore, the same bad decisions are made year after year because there is no accountability.
So how does a firm make marketing accountable? The need to answer that question led me to Northwestern’s Integrated Marketing Communications program. Okay, maybe that wasn’t the exact question that was on my mind when I applied. I was interested in learning ways to use statistics to guide my marketing decisions. It took me a couple quarters in the program before I discovered that what I really need to know is how to make my marketing programs accountable in a financial sense.
In order to make marketing accountable these four steps in thinking must occur:
- Marketing must be understood as an investment not an expense
- The investment is in the customer not the product or service
- Each customer has a financial value to the firm that can be calculated
- Customer investments must yield a measurable impact on profit
If marketers strive for accountability and build ways to measure the financial impact of their activities into their plans, the marketing department will no longer be viewed as place where money goes to die. Instead, it will be understood as being closest to the source of cash flows.
For a more in depth look at accountability check out Marketing Payback.