Customer Economics

You probably already know this, but it is worth bringing it back up, since almost every CMO today has a lifespan approximately the same time as the gestation period of an elephant. I wonder if those that do get the quick heave ho slant towards the academic way of thinking and acting. Consider this:

The American Marketing Association changed their 20 year old definition of “marketing” in 2008:

Older Version:
“Marketing is a process of planning and executing the conception, pricing, promotion and distribution of goods, ideas and services to create an exchanges that satisfy individual and organizational goals.”

Newer Version (2004):
Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

Latest Version (2008):
“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

According to Nancy Costopulos, chief marketing officer of the American Marketing Association, “Marketing is no longer a function — it is an educational process.”

For the record, I am encouraged it took about 40 years to actually add the word customer into the definition in 2004.

With respect to the 2008 revision, the context from Ms. Costopulos follow-on quote is revealing. “Marketing is no longer a function” is the kiss of death. Body parts have functions; parents have functions, heck even the IRS has a function; but not marketing. It just kinda floats out there wandering around without purpose or a role. I’ll give her the benefit of the doubt but probably not a smart reference quote as CMOs are under scrutiny every day. By adding “society at large” along with context that marketing is an “educational process” is as close to getting fired based on fluff as I can think of. Lots of academic chit chat, white boarding and altruist on-campus atmosphere probably doesn’t arm CMOs what they need to live another day. I can imagine how the CEO of a company that is trying meet his/her business goals, thinks about this CMO’s chit chat:

“Well boss, things are going swimmingly well….my department is dysfunctional (contrary to the popular belief that all departments are functions) as I try and use shareholder’s money to educate the consumers why blue tinted bottled water is better than clear water. I suspect after about 4 years of our educational process, millions of dollars later, the consumer will “get it” and we will start to see some sales progress. Plus we helped’ society at large’.”

My advice? Stick close the customers and prospects that deliver the money, being the black ink; not the red kind. Or you may get “pinked”.

This entry was posted on Tuesday, April 7th, 2009 at 6:44 am and is filed under Marketing Process Improvement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.