Service Provider OR Value Creator: Escape the Classic Marketing Catch-22

Service Provider OR Value Creator: Escape the Classic Marketing Catch-22

The sales team loves you – because you are always responsive to their ad hoc requests for a presentation, brochure, case study, or email campaign NOW. The CEO may love you too – because you are filling the pipeline as requested to meet quarterly revenue objectives.  But, despite the love you are uneasy. You know that because you are so busy with tactical marketing initiatives you don’t have the time or budget to fulfill marketing’s strategic role (generating value) and significantly improve organizational results.  And that feels bad.

If this sounds like you, you’re not alone. This is the classic marketing catch-22.

To help you escape the catch-22, this article starts by describing the characteristics of a service organization to sales and a value creation organization. Then, for those of you who believe that you are too far on the service organization end of the continuum, we provide five steps to help you transition your organization to more of a value creation orientation.

You Know You’re a Service Organization to Sales When:

  • Your day-to-day work primarily involves converting inputs (requests) into desired outputs (presentation, campaigns, collateral, etc.) through the appropriate application of resources (talent, information, etc.).

  • Marketing’s objectives and priorities, and conversations with the sales team, are typically focused on service delivery (time, quality, and budget) and on sales satisfaction measured in marketing qualified leads (MQL).

  • The focus is on serving and solving tactical problems as efficiently and effectively as possible.  Some marketing organizations that operate in this fashion can be proactive, but ALL marketing functions that operation in this fashion must excel at being reactive.

The challenge for these organizations is that while you can measure your activity and output, it is very difficult to actually measure your contribution, value and impact to the business.

You Know You’re a Value Creation Organization When:

  • The focus is on improving and implementing changes that will maximize the organization’s success and enable it to stay abreast or even ahead of market, customer and competitor moves.

  • You believe it is your responsibility to identify, investigate, evaluate, recommend and prioritize market and customer opportunities.

  • Metrics conversations are centered on product adoption/acceptance, customer acquisition, customer retention, customer growth, market share, etc.

Marketing organizations that act as value creators may be reactive at times but true value creators are proactive.

Ready to start the transition to being more of a value creating organization?

Five Initial Steps to Transition from Service Provider to Value Creator

  1. Own Your Company’s Positioning: Creating customer value is increasingly seen as a key source of competitive advantage. The purpose of all businesses is to create a value proposition for customers that is superior to, and more profitable than, those of competitors. This value proposition becomes the basic ingredient for the company’s positioning. Per Trout and Ries, the company positioned as the leader gets about 50% of the market, number two gets 25%, number three gets 12.5%, and the rest of the competitors split the remaining 12.5%.  Marketers who are value generators are responsible for positioning, and a key first step to transition to a value creator is to create and maintain the company’s positioning and all that entails.

  2. Focus Marketing on Real Value Creation Activities: Take the lead on keeping conversations and investments focused on developing a continuous stream of products and services that offer unique and compelling benefits to your customers. Some of your first efforts might include, but shouldn’t be limited to, product and process efforts, gaining insight into the needs of well-defined segments, leveraging data and analytics to accelerate efforts within existing markets or to create new markets, and reconfiguring company and/or industry value chains. Establish and own a sustainable process of value creation. If the work at hand doesn’t meet the criteria, discuss where it fits among the priorities for Marketing.

  3. Develop a Deep Understanding of Strategy: Marketing strategy is the critical link between marketing objectives and marketing programs and tactics. Strategy selection provides focus and enables an organization to concentrate limited resources on building core competencies that create a sustainable competitive advantage to support pursuing and securing the best value creation opportunities.  It provides the guidance and direction for channeling the organization’s marketing resources in order to generate market traction, penetration and dominance.

  4. Speed Up: Opportunities don’t linger in today’s fast-paced dynamic customer-driven market. Remember, the time value of money concept says money received today is better than money received in the future. Speed of opportunity execution is just as important as speed of opportunity identification.

  5. Define Measures of Success Tied to Value and Impact:  What more is there to say?

How to Manage the Transition

If change was easy everyone would exercise and no one would smoke. Here are some basic steps that you can take to overcome the inevitable fears and objections:

  1. Begin with a clear vision of the future organization and intended results – how will marketing operate better and differently once the changes are implemented AND adopted. How will team members, the organization and shareholders benefit?

  2. Share the vision with the executive team, especially sales, as well as your team so they can better understand their roles and influence, and be more predisposed to adopting and adapting. Encourage them to contribute feedback and ideas and to actively support the transition.

  3. Be clear about the investment required both hard and soft costs – for example changes in personnel.

  4. Pay attention to the order of the change management activities – where do skills, technology, etc. fit into the flow?

  5. Choose partners, inside and out, and tools that will support your change management process.  Leverage internal change agents to help champion the process and motivate resistors to onboard.

  6. Phase your rollout and create metrics for each stage so you will know when you and the team are ready to move to the next phase and that will prove the value of the change to the rest of the organization.

 

For more on how to be the change agent for this transition check out 5 Steps for Serving as an Effective Agent of Change.

The C-Suite expects a measurable return on their marketing investment. In order to meet this expectation marketing must be able communicate how it is relevant and to more resemble a value creator than a service provider. Generating value for the business requires working the numbers, then tracking and reporting on the performance to the numbers.  Taking a customer-centric view rather than an internally oriented sales-support revenue-centric view and “doing the math” facilitates the creation of a marketing organization that is relevant, can measure its value, and more importantly, affects revenue and profit. Learn more about what value creators do better and differently.