I was recently asked the question on the Twitter machine:
“In an age where marketers have been shut out of sales and pricing decisions, how do you convince execs to let marketing get involved?”
It is a good one, so I decided to dedicate a blog post to this idea.
Let’s begin by asking ourselves why marketing finds itself in this position.
One reason is that, in many organizations, marketing has been pushed to the kid’s table because of a lack of strategic focus that has given many executives that they can’t be trusted or that marketing is only the coloring in department. This is tactification in its purest form. Without solid marketing voices, focused on profits and strategy, the challenge of getting a seat at the table will likely continue.
Another reason marketing doesn’t have a seat at the table is due to the tendency of too many marketers to shoot off at the mouth about whatever tool, gadget, platform, or shiny toy that comes along as the thing we need a “strategy” around.
In the before times, I remember sitting at a presentation here in DC with a CMO where he smugly showed a slide with about 200 different tactical tools on it and said, “This is what I have to think about every day.”
Of course, before I could catch myself, I muttered, “Because you are a moron” loud enough for about a dozen people around me to hear and they all started snickering.
But this is an example of not having any indication of what the role of marketing is: to grow profits, to sell stuff.
A final reason marketing struggles to get a seat at the pricing table has to do with the fear people have of pricing conversations.
I don’t get it. If you set the right price and advocate for pricing in the right way, there’s a tremendous upside because most people are pulling their pricing out of thin air anyway. So you can and should advocate for participating in pricing discussions because most folks are making it up anyway.
To get to ideas for how marketing can win back their seat, let’s look at three ways that you can up to use almost immediately. I’ll keep it simple.
Begin by standing up for the role of marketing in your organization.
In 2021, I did some research to see how the CEOs, board chairs, and other executives felt about marketing. The picture was gloomy because around 80% still felt like the marketing department were the fun folks at the party. They might like them, but they didn’t really trust them to drive true value into the business.
Why does marketing suffer so much?
Partly due to some of the reasons I listed above like lack of strategic insight, too much focus on tactics, chasing the shiny stuff, and a pure lack of marketing training all hit the list.
This can be a point of opportunity for you if you play your cards correctly because you can show the power of marketing. A few ways to start.
Focus on marketing’s role in driving profitability in the organization. One area where you can do that and push back on the sales’ teams neverending lust for discounts is by showing data around purchase habits and how controlling your price leads to increased profitability.
Don’t have a handy statistic, here’s one for you: for every 1% you can increase your price, you typically get a 10-12% increase in profitability.
Second, speak the language of business: In my research and conversations with executives, a primary challenge that I find out about a lot of marketers is that they speak the language of Marketing Twitter and industry insiders no matter what audience they are speaking with. You know this by talking about “links”, “impressions”, “platforms”, and other things you’ll read about on your Twitter feed or on AdAge.com.
Instead, if you want to get involved in the marketing conversation, you’ll need to use a different language on that I call, “The Language of Impact.”
Executives don’t care about what nonsense thought leader X said this week. Executives want to hear about topics and ideas that are going to help them with their important metrics like “profitability”, “market growth”, “new sales”, or “customer retention”. These are all things that add to the bottom line and will help you gain respect in the market. Especially if you talk about these ideas in a manner like this, “In Q3, we were able to grow profits 13%. That’s 2% more than we were expecting and we attribute that to a slightly larger uptick in customer retention from previous quarters.”
Finally, I’ve been sticking this in throughout, but I don’t want you to miss the point: show marketing’s power by using data and examples: If you know how to use numbers and examples to frame the importance of marketing, you can begin to control the conversation around marketing in your organization.
This means, don’t get sucked into mind-numbing conversations about the colors of the font on the logo, the way that your ad campaign is going to drive “mad impressions”, or things that stick you back into the tactics bin.
Stick to strategy and the power of marketing to drive real, strategic impact for the business.
How do you do this?
Maybe you talk about the destructive nature of discounting with numbers. You can say something along the lines of “Our research shows that discounting is likely a bad idea because it erodes our brand equity, undermines our price integrity, and for each 1% we discount we lose 10% or more in profit.”
Or, you might say something like, “Each customer we acquire costs $100. Our average customer stays with us for 46 months and our average product price is $13 a month. Maintaining the customer relationship costs about $5 over the customer’s lifetime. This means that at our current price point, each subscriber is pure profit after the enter their tenth month of service with us. Around the second week of the ninth month, the acquisition and maintenance pay off. So our proposed price increase can accelerate that moment of profitability.”
For me, the big key to gaining a seat at the pricing table for marketer’s comes down to one of confidence. Too many marketers have been trained to think of their role as one of tactics, that they have no power to influence the larger strategic decisions, so they don’t even try.
You should try because as my numbers and examples should show you, marketing has a lot of power to influence pricing. With marketing’s influence on pricing returns marketing’s organization impact.
I hope this helps.