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In the duck house: Parliament's lessons for marketers

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29th Jun 2009
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As the MP expenses row still rumbles on in government and the media, Nicholas Watkis looks at the consequences and what marketers can learn from the debacle.

For several weeks, the newspapers have been full of revelations about over-blown MP allowances and expenses. As a result, several politicians have been forced to resign, some will be deselected by their constituencies, and some may even be subject to criminal investigation. The standing of MPs in the eyes of the British public has never been particularly high but their image has now sunk to rock bottom so that many are regarded with contempt.

It is a serious matter because while the public believe in parliament, they have lost faith in the integrity and judgement of MPs to legislate on their behalf. It is quite obvious that some MPs were more interested in what they could get out of the system than what they could contribute. The comparison of the high claims of MPs with their voting attendance also makes interesting reading.

So what has gone wrong? The underlying causes seem to be that MPs, both individually and collectively, appear to have:
  • Lost sight of their purpose and developed self-interest
  • Concentrated on short term objectives
  • Failed to see consequences of their actions
  • Had an inability to see how their actions are perceived, regardless of legality or intentions
  • Failed to understand the perceptions of the electorate

But what has this got to do with marketing and marketing management in particular? In fact, there are quite a lot of lessons to be learned from this sorry saga, which apply to business in general, especially during a recession. At such times, there is a danger that with falling demand and revenues, marketers and other executives are inclined to develop short-term thinking, which manifests itself in: 
 

  • Losing sight of purpose of the business
  • The development of self-interest for self-preservation
  • Concentration on short-term objectives
  • Failure to see long-term consequences of action
  • Inability to see how actions are perceived, regardless of legality or intentions
  • Failure to understand the demands of the customer
What the marketers can learn
The objective of the chief marketing officer (CMO) is to produce and maximise the profitable monetary income for the business but all marketers involved in the marketing organisation are responsible for their contribution to the bottom line. However, maximising profitable income is not for the short-term; it but must be sustainable for the long-term. At the same time, there is also the objective of minimising costs, investment and the use of assets.
For most markets, demand usually slows during a recession. This means customers defer buying decisions until a later date, which slows the flow of revenue to the business. The reason customers buy products is not really for the benefit that they receive from the product or service, but for the fear of a problem unresolved, the work involved or the potential danger they face if they do not have the product or service. However, it should be remembered that demand has not gone away - it has been deferred. The danger for a business is that if circumstances change, then the customer may cease to have a need and, thus, the potential sale is lost.
With the possibility of slowing sales and falling demand, what actions should marketers take? Initially, they need to understand the current market environment, especially how customers are reacting and the problems that the customer is facing. Only then can effective actions be taken for the immediate and long-term benefit of the business. The immediate questions that need to be answered are:
  • How are customers affected by the recession?
  • Is their demand deferred – if so for how long?
  • Have their priorities changed?
  • What are their current problems?
  • What are their fears?
  • What assistance do they require?
The best way to illicit this information is by direct, face-to-face contact with a customer or potential customer. In this case, the business with a direct salesforce has a distinct advantage in customer relations over the company that relies on web sales or non-traditional selling methods. Answers to these questions may require a revision of sales expectations and cash-flow projections. In addition, the answers may suggest that when demand slows, for whatever reason, the sales and marketing communications message may need to be refined.
  • Is the current marketing communications message suitable for the current market situation?
  • How can the sales message counter the deferment of buying decision making?
  • What are the customer’s fears that influence the purchase?
  • Without playing on customers fears (which would be counter-productive), what benefits can be stressed that the customer might fear to lose by delayed decision making?
If marketers are to have credibility, they must develop and retain long-term thinking while enacting effective short-term actions for the future of the business. Customers need to trust and rely on their suppliers, and suppliers need to understand and trust their customers. Developing and maintaining good customer relationships is essential for the continuity of every competitive business - something that parliament could well learn when it comes to relations with its electorate.

Recent articles by Nicholas Watkis:

 
Nicholas Watkis is the founder of Contract Marketing Service, established in 1981. He is a fellow of the Chartered Institute of Marketing and a certified management consultant of the Institute of Business Consultancy. His new publication How Good is Your Marketing? will be published in autumn 2009

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