A Marketing Compass

-- End Ad Box --->conservative, undisciplined and very expensive
What we now call "marketing" began long beforemarketing practices. They realize that future
the name was coined. In the mid-1800s, travelingsuccess depends on developing and refining
salesmen camouflaged worthless tonics in fancymarket-driven processes.
bottles in order to peddle their "snake oil" to aOur observations suggest that the more
gullible public. Early successes led to the belief thatprogressive financial services organizations are
the right marketing approach could help producecurrently experiencing an intellectual and practical
favorable results in virtually any business situation.transition that has caused them to elevate the
The result was a proliferation of new promotionalrole of marketing within their firms.
applications-some ethical, many not. Over theTraditionally, marketers concentrated their efforts
years, companies of all types have spent billionson implementation initiatives while management
of dollars to figure out what works and whatdealt with the broader strategic issues that
does not and marketing has evolved from itsaffected the firm's future. The advent of
rather crude beginnings to encompass a plethoracustomer-driven marketing and the attendant
of sophisticated strategic and tactical techniques.need to understand market-driven influences
Over the years, the consumer products industrycaused management to recognize the importance
has led the marketing charge and createdof accurate, timely and in-depth marketing
marketing best practices that helped spawnintelligence-concerning customers, markets,
consumer giants. Meanwhile, most financialdistribution channels, products and services-to the
services firms are being dragged, kicking andstrategic process. To address these new needs,
screaming, into the era of sophisticated marketing.Marketing Directors began to play an increasingly
Putting The Customer Firstimportant role in the strategic planning and
Peter Drucker was an academic and marketingdecision-making process.
luminary whose writings have greatly influencedAs a result, the very nature of the marketing
the thinking of marketing practitioners. Over fiftyfunction in many firms is changing dramatically.
years ago, Drucker developed the concept of aThis new breed of marketing professional now
customer-centric marketing approach and coinedworks closely with senior management on
the term "customer defined value." This conceptimportant strategic projects that will impact the
has since become an integral part of marketingentire organization and shape its future success.
literature and the guiding principle of modernThese projects include the development and
marketing. The following statements, paraphrasedrefining of:the firm's mission statement and key
from Drucker's extensive writings, reflect hismessagesbusiness objectives and value
fundamental mandate that "the customer'spropositionsstatements of the company's relevant
interests must come first:"differentiation and competitive advantages.
The only valid definition of business purpose is toAt the same time, however, the status quo still
create a customer.prevails in many financial services organizations
What the business thinks it is producing is not asthat have not yet recognized the benefit of
important as what customers think they areadding sophisticated marketing to their business
buying; what customers consider to be of value ismix. Some organizations continue to squander
decisive.valuable marketing resources on advertising
Every business has only two basic functions:campaigns focused on increasing visibility or gaining
marketing and innovation."share of voice." In addition, the persistent
Marketing is your whole business as seen fromproblem of differentiating marketing from sales
the customer's point of view.still remains largely unresolved in many of these
While the concept is straight-forward and easilyorganizations.
articulated, most financial services organizationsThe Bottom Line
have found it difficult to implement meaningfulThe financial services industry is currently going
customer-centric practices. Some of the mostthrough a dramatic marketing transformation. As
common obstacles have included a product-pusheffective financial services marketing evolves to a
mentality, a focus on short-term profitability,cross-functional, multi-disciplinary activity,
under-investment in marketing activities, and thesuccessful firms will create a culture of customer
lack of solid market intelligence about the needsorientation throughout the organization and
and wants of target markets.incorporate advocacy for customer welfare in all
However, in the future the most successfulcorporate decision-making. Unfortunately, this puts
financial services organizations will be those thatthe goalpost a significant distance away for far
make Drucker's principles their own throughtoo many financial services firms.
client-centric and creative applications.The challenge for management is to provide the
The Advancing State of Financial Servicesleadership required to displace the status quo and
Marketingcreate a culture of opportunity. To compete
The financial services industry has lived on theeffectively, financial services firms must become
edge of turmoil for the last couple of decades. Asattuned to the market and adopt (and maintain) a
a result, the industry has undergone significantmarket-driven focus on an organization-wide basis.
structural changes. Further, in response toThose firms that successfully develop a
increased competitive pressures, many financialcustomer-oriented culture will be rewarded with
services organizations have also become awareenhanced opportunities for innovation, improved
of the need to reconsider their traditionallyperformance and incremental profitability.