Brenda was excited. She had just met with Hank—a rep from MarketNow, a market-research consultancy. And she was bowled over by the short case studies that Hank had presented. The cases highlighted three companies that had used MarketNow's methodology—and garnered impressive financial results. "This is great, Hank," she told him at the end of their meeting. "I'll definitely recommend MarketNow to Tom, our marketing director."
The following week, Brenda met with Tom to present her argument for purchasing MarketNow's services. She made sure to emphasize the case studies that Hank had shown her. Tom listened carefully, then said, "I can see why you like MarketNow, Brenda. But the companies featured in these case studies are operating under very different conditions, with different strategies. MarketNow's methodology may have been ideal for them, but we can't assume it'll be useful for us. You need to put a little more thought into whether this methodology can really help us improve our market research and our bottom line."
As Brenda's story shows, new opportunities for marketers take many different forms: marketing technologies, "best practices" applied by leading-edge organizations, new services and products offered by vendors.
To reinforce marketing's role in generating cash flow, you need to separate fads from the real thing—and identify the opportunities that will best serve your firm. How? Consider the following guidelines.
Resist innovation for innovation's sake
All too many businesspeople—lured by the flash and dazzle of a new technology or by glowing case studies of how a new practice has revolutionized companies everywhere—jump on the innovation bandwagon.
Beguiled by new possibilities, they neglect to carefully assess the novel opportunity's promise—or gauge its risks. Many fall victim to the trap of innovating for innovation's sake: They conclude that to remain competitive they must use the same tools or practices that everyone else is using. And they don't consider how well an innovation addresses real and important changes unfolding in the business arena: shifts in consumer needs or changes in competitive strategies, for example.
To avoid this peril, ask yourself what's happening in the larger world around you whenever you find yourself intrigued by a new opportunity. Which of these changes will a particular innovation help you manage better—thereby generating greater cash flow for your firm? For example:
- How might a new advertising practice enable your firm to profit from the fragmentation of media you see happening around you?
- How will a new process help the company avoid the price wars that have erupted as consumers have gained access through the Internet to comparative information about product pricing and quality?
- How might a novel technology offered by a vendor empower your organization to distinguish important patterns in customer buying behaviors across different regions in which your firm operates?
Change your conversation with vendors
Often, opportunity comes knocking in the form of agencies, suppliers, consultancies, or vendors that are seeking to dazzle you with their innovative products and services. How to avoid getting hooked by offerings that have little relevance to your ability to generate cash flow? Change the way you converse with these purveyors.
For example, develop a healthy skepticism for the best-practice case studies and "here's how our customer benefited" vignettes that many vendors insist on presenting while hawking their wares. Too many executives swallow case studies whole without considering how well they represent their own company's situation. For instance, a software application that helped one rival company triple its revenues may be useless to your firm if your company uses a markedly different business model or competitive strategy.
Instead of analyzing case studies, ask vendors to demonstrate how their product or service generated measurable value for a client facing challenges similar to your firm's and operating under similar assumptions. Demand quantifiable evidence of gains the client achieved. Relentlessly link the discussion to cash, by asking questions such as these:
- How will your product help me identify new, future sources of cash flow for my firm?
- How will your service enable me to harvest more cash?
- In what ways will your offering let me measure my department's impact on cash more accurately?
If you get an evasive or confused response, move on.
Assess the risks
In evaluating any opportunity, it's just as vital to assess the risks as it is to admire the potential rewards. But assessing risk takes mental discipline. The following tips can help:
- Whenever you collect an anecdote suggesting the benefits of a new tool or resource, actively search for another example indicating the opportunity's dangers.
- While evaluating a potential new technology, practice, or idea, ask, "If my company adopts this, what's the worst that could happen? And could we deal effectively with that outcome?"
- Discuss new opportunities with colleagues and acquaintances inside and outside your company. Have them play devil's advocate by arguing against adoption of a new idea or practice. Compare their arguments to your own business case for seizing the new opportunity. Which is stronger?
- If you know of a company that has adopted a new marketing tool or service, meet with your counterpart there to get his or her insights into the opportunity's risks. Ask:
- What hidden costs did you discover in the process of using this tool?
- What went wrong during the implementation, and how did you deal with each problem?
- In what ways did this new opportunity fail to meet your expectations or serve your needs?
By applying these and other guidelines, you reduce the chances of missing a potentially costly risk presented by an otherwise attractive opportunity.
Consider opportunities' impact on others
Think about how adoption of a novel idea or tool would affect other departments in your company. For instance, a new software application designed to make marketing processes more efficient may require managers in sales, IT, and other units to alter the way they operate. An application you're advocating may even conflict with legacy systems or security protocols.
Think through how a new opportunity will affect your peers. For example, suppose you believe your company could bolster cash flow by overhauling how it gathers and analyzes customer data. Before presenting your idea to your peers in IT, familiarize yourself with the lingo and inner workings of IT. Acquire a basic understanding of how your firm's customer databases operate and what their limitations are. By "talking the talk," you'll enhance your credibility when advocating your idea to the IT staff.
Note: This article is adapted from the book I wrote with Allen Weiss and David Stewart titled Marketing Champions: Practical Strategies to Increase Marketing's Power, Influence, and Business Impact (Wiley, 2006). To learn more about the book and to download a chapter, visit www.marketingchamps.com or order the book from Amazon.
