The Marketing Missteps of the CEO: Part 1

Every year hundreds of thousands of American businesses close their doors; tens of thousands in Oregon do the same. Why?

Research on business failure consistently shows that poor marketing and leadership are among the chief culprits.

But what exactly are the marketing mistakes that business leaders make? What specifically are they doing that hurts their businesses, and what aren’t they doing that could help?

I’ve been asking that question for years as a marketing executive with domestic and global companies, and as a consultant to emerging businesses. More recently, I’ve been focused on researching this, and interviewing investors, board members, academic leaders, and CEOs.

Sin #1: They don’t understand what marketing is, or what they should demand from their chief marketing officers.

This sin, like most of the others, is particularly acute in high technology companies, and especially those that sell into business (B2B) markets. Countless executives view marketing as the part of the organizations that “does the brochures and trade shows.”

Thinking that marketing is about data sheets or trade shows is like equating the development of a movie script with typing. Marketing is about driving profitable growth. It’s about figuring out who you’ll target, who you’ll ignore, and then what you can do with your products, services, pricing, sales channels and brand to create more customer value and loyalty than your competition delivers.

In “The End of Marketing as We Know It” former Coca Cola CEO Sergio Zyman argued that marketing is everything we do to get more people buying more of our products or services more often for more money. The operative word here is everything. Here’s a great example:

Author James Drummon tells the story of a company looking to buy an enterprise software solution and a site visit to a prospective supplier. When the company’s team of executives visited XYZ Software, one of the finalists from the vetting process, it was pouring rain on a cold December day. “All of the parking spaces within a reasonable walking distance of the front door were reserved for XYZ’s executives,” Drummon notes.

The buyers circled the building, finally locating a spot about 200 yards from the entrance. One of them recalls, “As we were gathering up our umbrellas and buttoning up our slickers one of my partners said, ‘What are we doing? If these blokes care so little for their customers that they will not even provide convenient parking, what kind of service can we expect if we buy their software?’

“Whereupon we pulled out of the business park, canceled the meeting by cell phone and went on to our next appointment.”

That blunder cost XYZ Software a $1.8 million sale, not to mention the ongoing service and upgrade revenue stream that software companies get from customers.

Was that a marketing mistake? Absolutely. That parking lot was part of the “everything” Zyman mentions. Even if it wasn’t part of the marketing budget, it was part of the customer experience. No doubt the CEO established or at least tacitly endorsed the company’s parking policy.

Peter Drucker, the greatest management thinker of our time, observed that, “Marketing is so basic that it cannot be considered a separate function.  It is the whole business seen…from the customer’s point of view.”

This is Marketing, with a capital M—managing your customers’ and prospects’ experience with you, and the value they get from entering a relationship with you. If you do that poorly, all the trade shows or marketing hype in the world can’t save you.