An increasing number of marketing leaders now believe that driving business growth is Cause of existence for a marketing function. Recent research shows that the pressures on marketers to achieve revenue growth are becoming severe.
A 2021 global survey of marketing leaders conducted by the CMO Council found that marketers are now responsible for 44% of a company’s revenue on average, up from just over 10% in the early 2000s. In this study, nine out of ten survey respondents said they expect to increase revenue this year, and 63% said they and their marketing teams are less than very high or extreme Pressure to achieve revenue targets.
Unfortunately, recent research also indicates that most marketers have not bypassed marketing communication tactics in their efforts to drive growth.
In the February 2020 issue of CMO . ScanFor example, more than eight out of ten survey respondents said that marketing plays a leading role in their organization in marketing communication activities such as brand building, digital marketing, advertising, and social media. But fewer than four in ten respondents report that marketing drives many other activities – such as market selection and market entry strategies – that have a significant impact on revenue growth.
The need for market experience
Marketing communications are clearly an important aspect of the marketing function, but marketing communications lonliness Not enough to maximize revenue growth. To identify and effectively exploit all available growth opportunities, marketing leaders also need to develop a deep level of Market Experience.
Market experience can be defined as a comprehensive understanding of the economic and competitive characteristics of the entire market in which the company operates, including those market segments that the company does not currently target. Therefore, market expertise requires a deep understanding of the characteristics, needs, and buying behaviors of all potential buyers in the market, including existing customers and target prospects. And Not other clients.
Developing market expertise is always important, but it becomes crucial when a company needs to identify and take advantage of new or previously unrecognized growth opportunities in order to achieve its revenue growth targets. The reality is that identifying new growth opportunities is less likely to happen when marketing and other business leaders fail to take a comprehensive view of their markets.
Lesson from Jack Welch
An anecdote about Jack Welch illustrates this point. When Welch became CEO of General Electric in 1981, one of his first strategic goals was for every GE business unit to become the first or second player in its market. Welch’s strategic motto became, “No. 1, No. 2, Fix, Close or Sell.”
For several years, this strategy worked well, but over time, it began to have unintended consequences. In the 1990s, some younger GE executives began to question Welch’s strategy, saying it was costing the company significant growth. They argued that some business unit leaders were defining their markets so narrowly that they could justifiably claim first or second place. Because of the narrow market definition, growth opportunities have been missed.
In response to these concerns, Welch refined his strategy and began requiring all business unit leaders to redefine their markets so that they had no more than 10% market share. This forced business unit leaders to identify potential revenue growth opportunities that were previously unrecognized or overlooked.
Always look beyond the essence
It is understood that marketers spend most of their time and energy creating and developing software designed to increase revenue from the core market(s) – existing customer types, existing product/product configurations, current geographies, etc.
Some companies have a vibrant primary market that offers plenty of growth opportunities, but many companies operate in markets where growth is difficult. In addition, most markets evolve from a “growth stage” to a “maturity stage,” so even if a company’s primary market produces healthy growth today, that can easily change.
When the revenue growth generated by the company’s core market(s) slows down, the company’s leaders are likely to start thinking about some kind of business expansion. Expansions that take the company “beyond its core” are strategic business steps that require a thorough evaluation.
In my opinion, marketing should take the lead in evaluating the opportunities for expansion in the market. Marketing leaders possess (or should have) the skills to analyze the growth potential and risks presented by new markets or market segments. In fact, I would argue that marketing leaders should do it Always Evaluates potential expansion movements so that they are Always Willing to provide other senior company leaders with a range of strategic options to drive growth.