Why Marketers are best placed to drive Profit

“Growth” is now a generic business term. In recent years it’s become an established business function with its own dedicated CxO leader. But Growth for Growth’s sake is often meaningless and occasionally counterproductive. Shareholders and CFOs are challenging Boards to deliver Profit Growth. That’s the real test for any business.

Faced with Profit Growth as the Primary objective, the C-Suite starts to get nervous. The Sales leader squirms about challenging economic conditions, international tariffs, overseas conflict and suggests cutting prices* to increase demand. The CTO bemoans the need for (yet another) new piece of technology that will prove difficult to integrate and won’t generate the outcome that was claimed in the business case. The CFO then trots out the classic “do more with less” line and pushes for efficiencies, (aka headcount reduction in the areas that interact directly with paying customers).

A challenging economic outlook and rapid technology changes aren’t temporary – they’re constant. Therefore, any successful business must operate in a way that enables them to thrive with today and tomorrow’s reality.

Let me reintroduce you to a marketing function that is both trained AND experienced at delivery. Training is imperative: Marketing Science (just like Science Science, where an activity is proven to deliver the same result repeatedly) has advanced significantly, and you want to be led by a marketing team that’s fully across it if you’re going to deliver sustainable Profit Growth.

Firstly, they’ll use an accurate Segment Map of the Market. It’ll guide everyone to understand the different types of customers, their individual needs AND value. Then they’ll utilise the Strategic understanding that typically only 5% of your target (profitable) customers are ready to buy now, and the remaining 95% need to be mentally primed, ready to remember and buy you when they are in market. Those who get remembered get bought, Marketing Science-proven for BOTH B2C and B2B.

So, your Marketing team is clear on which areas of the Market are profitable and how to position to ensure your business comes to mind. 

Next, ALL your Marketing investments are used to accurately land this positioning in the minds of the target segment. There’s no guesswork involved or $ wasted. They know how to maximise effectiveness (and don’t chase vanity efficiency metrics), so the $invested  maximises results from the profitable segments they’re targeting. The team is ensuring you’re Differentiated AND Distinctive, which makes you more visible and easier to consider and BUY.

However, the Gold Medal goes to the marketing team that manages the Brand so well, that it develops Pricing Power. The Harvard Business Review has proven that pricing is the business lever that increases profit, (not an increase in sales volume or a reduction in fixed or variable costs), the most. By building an emotional connection between the profitable target segment and your brand, over time pricing power develops. Pricing power means that you can increase your prices relative to the competition without seeing a drop off in volumes. It’s so powerful that you stand a chance of tempting Warren Buffet out of retirement to invest in you – this is the kind of business he backs.

Finally, good businesses can endure with a product that performs well and where the experience of using it is easy. But GREAT businesses, they also align their efforts around the available profit opportunity and continually harvest this over time. Marketers who are trained and experienced are the Architects of Great businesses, delivering sustainable profit growth today and every month, quarter and year.

*the addiction to discounting to drive Sales volume is the poison that kills Profitability. Don’t say Yes to the Sales Leader who tries to push it on you.