13 November 2006
Linda Fisher, Design Management Resources
Linda Fisher, Design Management Resources

Corporate directives come and go. And so do corporate trends. There has been a growing, emerging trend for accountability in corporate marketing departments in recent months, and that is expected to increase. During the 90's, business was booming, stock prices were climbing, and the market cap was growing. The only metric businesses worried about during the past decade were shareholder values. That isn't the case today. Corporations are trying to assess the value of that last area of their business that defies easy quantification: their marketing departments.

Philip Kotler, a distinguished Northwestern University marketing professor, noted in his writings in 2004 that CEOs are, "growing impatient with marketing". Mr. Kotler: "They (CEOs) feel that they get accountability for their investments in finance, production, information technology, even purchasing, but they don't know what their marketing spending is achieving."

Traditional marketing metrics that have long been measured - tracking sales leads, market share and CPM (cost per thousand impressions) - are no longer sufficient for the CEOs and CFOs of corporate America. The challenge posed by trying to nail down the actual ROI (Return on Investment) of marketing, has long been an issue for debate. In the September 2004 issue of CMO Magazine, in an article entitled Metrics Revolution , it was cited that the main problem with ROI is that there is no consensus about what the term actually means. The article goes on to say that a recent survey by the Association of National Advertisers (ANA) and Forrester Research highlighted the challenge in striking terms: 78 percent of respondents
said measuring the sales impact of marketing was difficult, and most couldn't even agree on the definition of ROI. "Measurement continues to be the hardest task in managing marketing campaigns," says Jim Nail, principal analyst at Forrester.

Besides looking at incremental sales revenues that may have been generated by their marketing functions, and changes in market share, corporations are tracking more subtle markers. Audits regarding consumer changes in brand awareness, or their attitudes toward corporate brands, can yield significant indicators as to corporate success in the marketing of those brands. Consumer changes in purchasing patterns are also strong indicators. Some markers are much more difficult to quantify. In the same article cited above, Metrics Revolution , Colin Sabol, General Manager of Marketing at GE Infrastructure in Trevose, Pennsylvania, makes this observation, "Alone, ROI cannot be used as an effective measurement tool for marketing because the value of relationships, attitude, brand awareness and reputation are difficult to calculate in financial terms."

It is obvious that many of your corporate clients are using different criteria to measure their marketing ROI depending on their strategic goals. They seem to be assessing where they are in the marketplace, working with a strategic marketing plan to bring them where they want to be, and then deciding on the specific resources that will get them there. Then, tracking the proper mix of metrics should help them to determine whether they've gotten where they wanted to go.

The corporate trend toward CMO (Chief Marketing Officer) interface with the CEO, CFO and R&D management will intensify. In fact, it can be argued that all CMOs will have to learn to speak the financial language of their corporate management counterparts. Then, and only then, will real understanding of the value of marketing be fostered among all corporate officers. Professional marketers are in real danger if they talk "value" but cannot quantify that value. Do you, as a design firm principal, see the "writing on the wall" here?

CMOs will also have to quickly grasp the fact that CEOs are focused on revenue growth through innovative new product launches. Thus, there is an urgency for CEOs and their corporate marketing organizations to grapple with the issue of marketing department accountability, and ROI. At some point, entire corporate management teams must focus in thought and practice on the subject of measuring marketing ROI. Otherwise, corporate marketing departments will face ongoing budget cuts, which may help short-term corporate initiatives, at the expense of long-term branding and customer relationship building initiatives.

What This All Means for Corporate & Design Firm Interface.
While global corporations do not have an "industry-wide standard" in their respective sectors, most of them do seem to measure marketing ROI in diverse ways, some of them similar. All professional firms of creative services, with leadership or global aspirations, must understand the winds of change that are currently blowing through the corporate world. Otherwise, how can they successfully position and market themselves, and their services, to an ever-evolving client base? By having a glimpse inside from the window, you can discern the world that your corporate counterparts inhabit, understand it better, and communicate more effectively.

Design firm principals need this information to better brand, differentiate, position and set marketing strategy for their own firms, so that their services meet the needs of the industry sectors they have chosen to work with. This exercise is not a superfluous one for design firms, but an absolute necessity if they are to rise in stature above their competitors, cultivate meaningful client relationships in their targeted industry sectors, and position themselves to become global design firm leaders.

Design firms must also emulate the corporate model. They must track and quantify the success of the various marketing activities that they undertake. They must hold the marketing person accountable and responsible for these marketing functions. They must make adjustments, in times of change, to their overall marketing strategies.

More importantly, design firms are providers of professional services. As such, they can fill an important role for their corporate clients. While many design firms pay lip service to the concept of CRM (Customer Relationship Management) with the worn-out: "We partner with our clients", the true leaders in the industry actually fulfill CRM. This is not about forming relationships based on amiability. Relationships of depth are formed when design firms truly know and understand their customers businesses. They collaborate with corporate marketers as co-managers of "the Brand". This leads to mutual respect and trust.

These design firm principals understand the value they offer their clients by offering them true brand management. Whether design firms offer overall graphic, industrial or environmental design services, true brand management should be part of the package. An understanding of corporate directives and strategies makes a profound impact on design firms abilities to collaborate with their clients at the highest level. The primary objective here is that job #1 is to extend the client s brand message, build brand equity and market share is what the true leaders among design firms do. The brand (design) is the core value in all products and services. This understanding is precisely what makes Landor, Landor.

Design Business Metrics.
As is the case with your corporate clients, you as design firm principals, should also be concerned about metrics. And not only for your own businesses, as stated above. Design firms that are truly professional work with their clients to write effective design briefs. The design brief outlines the goals and objectives of a design project so that the design firm and the corporate client begin with an articulated plan. This develops trust and understanding from the beginning of the relationship. It also creates an ongoing reference for both firms as the project progresses and ensures that every relevant issue and question is covered before the project begins. In this context, design firm principals should initiate the question of metrics with their corporate counterparts and include this in the actual design brief. Quantifying the client s goals in reference to budget and time-line is one thing that must always be included in a professional brief. The truly professional design firm principal includes a meeting, at a specified point during the project to discuss metrics with the client, and designates that within the design brief. He informs the client that he wants to know how his corporate group intends to set up a metric measurement for the success of the design project. Then, an additional date can be designated within the brief for a point three to six months down the road, or whatever time frame the client deems sufficient, after the project is completed, to measure the success of that project.

Smart design firm principals follow up with clients once their design solutions are brought to market. They seek information about the success of their work - and yes - they ask for metrics. Has the product met expectations? Has it exceeded them? If so, by how much? Real sales dollars, or percentages, are meaningful. Additional market share gleaned within a category is meaningful. A strengthened brand is meaningful. Not only to your clients. To your firm, as well. When you can add metrics to your case studies, these make compelling, eloquent statements about the excellence of your firm's work. Imagine adding case studies with this kind of impact to your web site, or your brochures.

Speaking of your web site, remember what we've been saying all along. In customer relationship building, you must show that you can meet the goals and objectives of your clients more than satisfactorily. It takes time to build a high level of trust. The more on-target your firm is in its electronic marketing of its services on your website to your target audience, the more intelligent and professional the language, and the more grounded it is in a strategic marketing plan the further ahead your design firm will be in setting the stage for effective CRM.

Imagine letting your clients know that you are always going to follow up with them, after the projects are finished, to gauge the success of your mutual collaborations. That is true CRM, as well. In this day and age of intense, global competition, design firms who want to rise to the top as leaders, live each day with a deep understanding of what CRM truly means.

Closing Thoughts. . .
My advice to the design firms who are leaders - or aim to be - get familiar with metrics and cultivate an understanding of them from your corporate clients point of view. Also, learn to measure your own marketing activities by applying metrics to them. Lastly, bring CRM to a whole new level - and get metrics from your clients concerning your completed projects. Use this information in your case studies. This will, in turn, convince prospective clients that your design firm is the one for them. After all, you haven't just stated that you deliver. You've proved it.

About Linda Fisher
Linda Fisher internationally recognized author of brand marketing, marketing and public relations articles has her latest article published by Icograda.

Design Management Resources
Design Management Resources researches and writes articles for clients. Most recently, our topics and issues have been accepted and published by Brand Packaging, Package Design Magazine, Shelf Impact & Packaging World, The CEO Refresher, Quirk's Marketing Research Review, Kid Power and ICFAI's Advertising Express in India.