John Wanamaker, the owner of Oak Hall, a Philadelphia store opened in 1861 is famed for having coined the statement: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. I dare say that this statement could have stuck in the mental make-up of our finance colleagues who seem to believe that marketers are spenders who lack clear understanding of financial matters. The same statement could also be used by marketers to label finance people as a thrifty and unreasonably tight-fisted bunch of individuals who do not understand the value of marketing.
marketing insights with DENNIS MAMBURE
There is a sentiment that there is bad blood between marketing and finance. This view seems to be suggesting that the two professions are at cross purposes most of the times. We need to interrogate this sentiment. Is the war just banal praxis or a case of constructive tension?
A war between marketing and finance? Nothing could be further from the truth. Marketing and finance are much closer and well-knit than meets the eyes. They are complementary and not antagonistic. Yes, there may be conflicts and different views in as far as approach and priorities, but then who said conflict is a bad thing? There should always be constructive tension between and among departments.
Let us explore the possible reasons why there is a perception regarding the animosity and dysfunctional relationships between marketing and finance. There are myths which need to be busted. I will discuss a few of the myths here.
Myth 1: Marketers are party animals
This is one of the most common charges labelled against marketers. It is alleged that marketers are party animals without any idea of the impact their activities and indulgences have on the bottom line. This is really a laughable accusation. Marketers are in essence the creators of every cent that goes through the coffers. If we go to basics, Jerome Mccathy as way back as 1960 proposed the famous four Ps of marketing. Of course these keep on expanding to as much as eight and even 11 for some scholars. product, promotion, pricing and promotion for all purposes and intents, account for more than 60% of the entire organisation. Marketers are not just spenders, they are actually involved in the entire value creation and the little crumbs they spend on “partying and golfing” often improves the long term customer pipeline for the organisation.
Marketers know how to make money and they are clear on how to spend in order to make more money. I posit that in all fairness, marketers are actually specialists with general management competences as they have understanding of internal dynamics and an intimate knowledge of the external environment.
Myth 2: Finance people are just too nosy
This is not true. Finance people have a crucial role to play in the organisation. They play the role of resource allocator. Someone has to play the critical role of distributing the scarce resources available, or at least coordinate this activity. Finance needs to manage liquidity, cash flows, and taxation matters among a plethora of other issues. This requires sober minds and no one is better placed than the finance people. They have the skill and the competence to do that. For good order and corporate governance somebody has to do the numbers and play the prefect in any set up. So yes, money issues are everybody’s business but someone has to take the lead.
Myth 3: Finance people do not have customers
Marketers, when challenged about their perspective on the costs structures, always argue that finance people are unreasonable because they do not have customers to look after. This is sacrilegious to say the least. Finance departments have customers. They are often the principal supplier to key customers ,some of whom, if not satisfied, can vote with their feet to the detriment of the entire organisation. Their customers include the taxmen, shareholders and other departments.
Myth 4: Marketing is a cost
There is a general tendency to believe that marketing is an expense. This is evident in the way expenditure on marketing is accounted for. In lean moments the first budget to be reviewed downwards is often marketing. Why? It is because marketing is treated as a luxurious expense. Marketing cannot be viewed as an expense. It is an investment. The role of marketing is to build the customer franchise, and ensure that the business has robust brand equity. All the successful enterprises of the world such as Apple, Coca Cola, Samsung, and Toyota have their brand equity intact. Investments were made into creating these multi-billion dollar brands. Finance and other business people should discard the notion that marketing is an expense.
Myth 5: Marketers do not understand money issues
This is the worst myth. Marketers, at least most of them, have an understanding of money matters. Marketers control the element that brings money to the organisation, the pricing element in the marketing mix. Marketers have a whole lot of metrics that they track, all in an effort to ensure that money keeps flowing to the organisation. These include measures such as the customer life, time value, return on marketing investments, share of market, share of voice, net promoter scores. These are all measures put in place to continuously take the heartbeat of the organisation and the market. When looked at closely, all these measures have a link to the dollar value. So marketers understand money.
The uncoordinated interaction of the various myths produces what is often mistaken as a war between marketing and finance. I do not believe that there is any war between the two because the elements of war are absent from all assertions, theories and speculations. RJ Rummel spells the causes and conditions of war, some of which are opposing interests and capabilities, changes in balance of power, individual perceptions and expectations, disrupted structure of expectations, a will to conflict, socio-cultural dissimilarity among others. War should be fought and won. There should be clear benefits or spoils of war. All these are absent from the so-called war between marketing and finance.
I believe the so-called war is just a banal praxis. If there are any differences or conflicts between these two, I am persuaded to believe that these are signs of positive conflict. Both departments often pull in the same direction, with shared goals, one corporate vision and congruence of purpose. If anything, this so-called war is really a manifestation of constructive tension which often is beneficial to the enterprise.
Dennis Mambure is a certified marketing practitioner, a holder of a Bachelor of Commerce of Honours in Marketing as well as an MSc in Marketing. A public speaker of note, Mambure is the head of marketing, products and channels for Barclays Bank Zimbabwe. He writes in his personal capacity.
This article was contributed on behalf of the Marketers Association of Zimbabwe, a leading body of marketing professionals promoting professionalism to the highest standards for the benefit of the industry and the economy at large. For any further information kindly contact firstname.lastname@example.org or visit the website on www.maz.co.zw. Follow this column, we will be further developing how to apply effective marketing strategies as well as other marketing matters.