The Future of Marketing: 4 Things You Need to Know

Technology is utterly changing the way that companies spend money on marketing.

I recently posted the 15 Greatest Marketing Innovations of All Time, so this is probably a good time for me to write about where marketing is headed. The four trends below are based on an unpublished chapter of " The End of Sales as We Know It," which I coauthored with Howard Stevens.

1. Marketing will become more tactical. In the 20th century, marketing was often seen as a strategic investment, so important to corporate success that there was not much point in measuring it. With the exception of direct marketing (catalogs, mailers, etc.), it was difficult to measure many marketing activities anyway, so few companies tried.

Today, however, companies gather far more data than in the past and have become far more sophisticated about measuring just about everything. There are now very few marketing activities that aren't "sliced and diced" to see whether they're actually making money.

This is not to say that companies don't need a marketing strategy! However, now that activities under the marketing rubric are measured, the marketing group itself must become ever more tactical in order to make the metrics improve.

In other words, there will be a lot less of "the ads must be working because revenue went up" and a lot more of "27% of our website leads converted into paying customers."

2. Commoditization will drive marketing investment. There's a growing awareness that product categories go through four distinct stages, each requiring a different level of marketing investment:

The entry phase. Sales plays the primary role, explaining the concept to buyers, getting them excited about it, following up to get reference accounts, and so forth. By comparison, Marketing plays a minor role, at best. The consulting phase. Once the product category is established, the salespeople continue to cultivate new accounts while marketing helps Sales to identify new leads. Marketing acts as a service organization to sales, with Sales still "leading the charge." The service phase. When several vendors provide essentially the same product, customers decide which product to buy based the ability of vendors to precisely respond to their specifications, their delivery requirements, payment convenience and so forth. During this phase, Marketing and Sales are of roughly equal importance. The commodity phase. Once a product becomes a commodity, Sales moves into the background (or goes away completely) while Marketing moves to the forefront, locating potential customers and setting up of fulfillment channels that do not require the overhead of a dedicated sales team.

As companies better understand this inexorable process of commoditization, they can allocate marketing budgets based upon the phase of the product category, rather than a preconceived notion of appropriate marketing investment.

In other words, there will be a lot less of "this product is our future, so let's spend marketing dollars on it" and a lot more of "it's time to shift responsibility for this product from Sales to Marketing."

3. Sales and marketing will stop squabbling. This trend emerges from the previous two, but to really understand it, some background is necessary.

Historically, Sales and Marketing have tended to play the blame game rather than work together. The common conflict usually sounds like this:

  • Sales: "Marketing give us bad leads, so it's their fault we're not making our numbers."
  • Marketing: "Sales doesn't follow up on the leads we give them, so it's their fault they're not making their numbers."

Or maybe like this:

  • Sales: "We need better sales materials and sales tools."
  • Marketing: "We spent big bucks on those last year and you didn't use them."

Better measurement of Marketing and a better understanding of product category phases tend to reduce opportunities for such disagreements to take place.

Better measurement helps Sales and Marketing define what constitutes a valid sales opportunity, based upon profiles that both Marketing and Sales have agreed upon. Tracking how well those profiles result in sales leads that convert into paying customers reduces the controversy.

A better understanding of product category makes it easier to plan and execute a gradual handover of responsibility from when Sales plays the primary role (the entry phase) to when Marketing plays the primary role (the commodity phase.)

4. Marketing will be more reactive and less proactive. The three trends above have been gradually manifesting themselves for the past 20 years, fueled by the increased computerization of marketing and sales environments. This fourth trend, however, is something relatively new, having developed only the past decade or so.

Traditionally, marketing has been seen as a "proactive" activity where marketing activities "create" a brand and "create" demand. That's beginning to turn upside down now that customers play a far more visible and powerful role in brands are perceived.

Review sites that post buyer experiences, for example, now play a bigger a role in defining brand image than any individual marketing activity. Using social media, companies can enlist customers and prospects to help with everything from defining product requirements to designing advertising campaigns.

If you think about Mad Men and mass advertising as the apotheosis of the old style of marketing, branding was seen as resulting from a flash of brilliance from a marketing genius. Today, effective marketing is more likely to emerge from a reading of what people are tweeting.

This is a profound change that's only beginning to be manifested in how companies and executives decide where and when to invest in marketing .

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