Some years ago I joined a very well-known financial services company in a marketing role. Eager to use the insights and experience I had gained for the good of my new employer, I immediately threw myself into my job. It soon became apparent, however, that whatever innovations I tried to implement (innovations which I still believe could have had a huge impact on the business’s bottom line), weren’t being taken seriously.
After only a few months, I left. In my view, the issue at that organisation was that marketing was the responsibility of the General Manager in charge of technology, who reported to the Chief Information Officer, who, in turn, reported to the CEO. In other words, marketing and communications were Cinderella functions, which were rarely entertained by the executive committee.
This is a state of affairs which is replicated at many, if not most, of our financial services providers, where the implementation of a strategy is almost exclusively in the hands of the 'numbers people'.
While I fully appreciate that large financial business stands and falls by the quality of its actuarial financial decision-making, equally, financial services business should stand and fall by how it is perceived by the market and how it communicates with its stakeholders and customers.
If a business is to survive and succeed, it has to create a value proposition that is favourably perceived and properly understood by customers.
Articulating that value proposition then becomes an integral duty of the marketing and communications function. By comparison, businesses that make and sell tangible products such as foodstuffs or motor cars have it relatively easy because consumers can touch and feel and quickly make up their minds about their products. Financial services companies on the other hand, are required to communicate a lot clearer in terms of how the create value for customers. At different life stages, most people need short term insurance and some form of retirement planning.
But in an economy that teaches consumers to expect instant gratification, the short—and long-term insurance value proposition requires careful, expert crafting and communicating.
And, in a country where, for decades, many millions were excluded from the benefits of financial services, or got along without them, the job of selling financial services is that much harder. Why, then, do some executives not believe the marketing department should be instrumental to core strategy?
A part of the blame lies, I believe, with the marketers and communicators themselves. All too often, marketing plans are submitted, which lack real insight into the business strategy and which, to be honest, often look as though they have been derived from off-the-shelf software-generated templates.
Then, when they are granted access into the inner leadership sanctum, some marketers shoot themselves in the foot by not being knowledgeable and conversant around business issues. I have witnessed how some PR practitioners use AVE to report media relations activities. I have further witnessed how deflated they become, upon realising that executives do not fully appreciate what an AVE means (AVE stands for advertising value equivalent, by the way). What executives want to know is: how does public relations help us deliver our value proposition to customers, employees, shareholders and regulators. In other words, how is it contributing to the value chain of sales, loyalty, and even in the broader context of society?
A few years ago, when I was Chairman of the Public Relations Institute of Southern Africa, I realised that public relations professionals did not have a keen interest when it came to figures, the real numbers that determine business success, that they simply weren’t interested in the issues that were most crucial to their companies’ value creation; it was almost as though they were determined to pigeonhole themselves into a “support services” category.
On the other hand, if they are never, or only occasionally, in the boardroom, marketers may not have the kind of understanding of corporate strategy that is necessary to devise and present marketing plans that add real value towards the realization of business strategy.
The draft King IV report on corporate governance is in the public domain, with a final report due for release on November 1. One of the most interesting parts of the draft report is found on page 61: “The governing body [i.e., the board of directors] should oversee stakeholder relationship management, including:. . .
“An integrated stakeholder communications plan that includes: The use of digital and other communication platforms as a strategic tool—for marketing, as a source of intelligence, to influence perceptions about the brand and product, and to improve transparency and communication … Systematic gathering and analysis of information emanating from communication platforms to assess reputational risks and to develop appropriate responses…”
If a business is to survive and succeed, it has to create a value proposition that is favourably perceived
The report fairly details governance expectations in terms of a Board of Directors taking responsibility for marketing, brand management and communications. How, then, is a board going to discharge this responsibility if marketing and communications are not top of mind for management—the people who are tasked with carrying out the policy that has been set by the Board?
I wish to reiterate how important it is for CEOs to take personal responsibility for marketing and branding. It should be a non-negotiable that this function is part of board room discussions on a full-time basis.
Tshepo Matseba is the Marketing and Communication Executive at Liberty Corporate.
With this approach, I am proud to say that as Liberty Corporate, we are making headways.