How cost-effective is your marketing?

Of all the various integrated disciplines in business, marketing performance has historically been the least quantifiable. Marketing in construction businesses should not be an activity in isolation. As the business getting function, marketing must be fully integrated with all the other operational activities. Marketing also may not be wholly divorced from activities such as finance, personnel and supply, as they all provide the necessary resources for the marketing function’s activities.

If marketing is truly about satisfying customer demand profitably, then it is arguable that everyone in the business to a greater or lesser extent is in someway involved in it. Thus while the chief marketing officer (CMO) may not have responsibility for other management functions, he should have an interest in the performance of the other business areas, as their activities will directly or indirectly effect marketing’s performance in providing the profitable satisfaction of customers.

Many companies are starting to attempt to measure marketing performance, but there seems to be little consistency in what they measure. Put marketing measurement into a search engine like google. Most of the results that will come up will be for customer relationship management (CRM), and return on marketing investment (ROMI) related to advertising and sales. If marketing includes all those activities which anticipate and satisfy customer demand profitably, then the measurement of marketing performance must include a lot more that just CRM and advertising ROMI.

Part of the problem lies in the definition of marketing. In many businesses, marketing is still seen as a separate discipline to sales. But if marketing 'includes all those activities which anticipate and satisfy customer demand profitably,' then it must include selling as the executive function of 'marketing'. One can take the argument further. The construction "product" or service itself is part of the provision of customer satisfaction, and therefore the marketing function and the CMO should be interested in the performance of 'production'. It effects marketing’s performance, just as marketing’s performance effects that of production/operations.

Marketers must be aware of the effect that their activities have on other parts of the business, principally production/operations and finance.

The purpose of marketing is to generate and sustain a continuous stream of profitable revenue for the business. Establishing the cost effectiveness of the marketing activities that generate the revenue may only be done by measuring in detail the overall performance of the marketing function, and comparing the results with the rest of the business. In future, CMOs are likely to be judged not only on the profitable revenue generated, but also on the cost effectiveness of the marketing activities which they manage.