How to Kill a Great Company in One Easy Lesson

Back in the 1980s, I agreed to help the owner of a small company grow his business. Within three years, it was the largest company in its industry.

By combining five key marketing strategies with kick-butt sales copy, we were attracting between 5,000 and 10,000 new customers every month. By 1988, we had more than 120,000 paying customers. Sales revenues and profits quadrupled.

At that point, my client decided to cash out – take his profits and retire – and asked me to help him sell his company. I created a 20-minute video and a comprehensive “company profile” to help attract prospective buyers.

The buyers – who paid top-dollar – turned out to be a team of three Rhodes Scholars with advanced business degrees from Oxford University.

Within a week after the papers were signed, the crackerjack marketing team we had built was placed under an oppressive bureaucracy: an “Executive Committee” made up of the new owners, their handpicked CEO, the CFO, and the General Manager – none of whom knew one blessed thing about marketing.

In days, the company went from being obsessed with marketing to being infatuated with something called “Corporate Planning.” Key marketers were sidetracked in day-long meetings – and, sometimes, week-long out-of-the-office marathons. Scores of crucial sales promotions were put on hold while the marketing staff diddled themselves silly with endless research and reporting tasks.

I, of course, went ballistic. I warned everyone who’d listen (at the top of my lungs) that de-emphasizing marketing was going to drive the company into bankruptcy.

That drew giggles all around.

“You’re overreacting,” said the new owners. “It’s going to be just fine,” chanted the Executive Committee.

It wasn’t fine. Not by a long shot.

The flow of new customers faltered, then plunged. Our active customer file began shrinking. Sales to existing customers plummeted.

Finally, unable to make the new owners see the error of their ways, I fired the client. As I walked out of the office for the last time, I told the CEO, “Now I understand what being a Rhodes Scholar does for you. You’d have to STUDY to be this stupid.”

I told the CEO that his company would be belly-up within six months. I was wrong. He filed for bankruptcy 90 days later.

Moral: Smart Companies put marketing first.

Okay, I admit it: I’m a marketing chauvinist. And it’s not because I think we’re necessarily smarter and better looking than everyone else. It’s because the only logical place for marketing is out front – leading the charge for your entire company.

It drives me nuts when executives who know nothing about sales and marketing mindlessly parrot phrases about “putting the customer first” – and then relegate the only people who actually talk to customers to an inferior position in the company.

Before the Rhodes Scholars showed up, my client had put sales and marketing first. And because the job of the Marketing Department was to respond to customers’ desires and concerns… it meant our customers were #1.

But the Rhodes Scholars and their preening “Executive Committee” wanted to be first – the masters of all they surveyed, at the pinnacle of the corporate pyramid. So they put sales and marketing in its place – under their thumbs, no more important than janitorial services.

And by doing so, they turned my client’s “Smart Company” into a dumb one in one fell swoop.

 

 

In a Smart Company, the Marketing Department exists at the top of the corporate pyramid.

 

Armed with the freshest intelligence on the desires and complaints of prospects and customers, the Marketing Department directs…

 

• The development of new products and the production of existing ones…
• The scripting of the sales force or telephone customer service reps…
• The creation of sales promotions and the layout of the catalog and/or store…
• The shipment of products and the delivery of services…
• The management of the Customer Service Department, and…
• Every other activity in the chain of events that begins with contacting a prospect or customer and culminates with the cha-ching of the cash register.

In Dumb Companies, top execs fail to understand the supreme importance of sales and marketing – or, worse, they see it as a “necessary evil.”

And their structure shows it. Marketers are kept under tight rein – slaves to multiple layers of bean counters, bureaucrats, and other self-important gasbags who have long forgotten where the money in their paychecks comes from – if they ever knew in the first place.

Even worse: Dumb Companies make sure that marketers – the only experts in the company capable of boosting sales, revenues, and profits – are frozen into inaction and that crucial sales campaigns are delayed by corporate procedures requiring marketing-challenged morons at the top to approve their every move.

The CEO and top execs spend no more time or effort on sales and marketing than they do monitoring Human Resources, or any other department. Marketing is beneath them. Something the weirdoes down on the fourth floor are responsible for.

In a Smart Company, every employee clearly understands that his/her job exists for one reason and one reason only: to help marketing sell more, more, more!

• Accounting exists to ensure that the Marketing Department has the financial resources it needs to attract maximum numbers of new customers and to boost sales revenues.

• Human Resources exists to ensure that the Marketing Department has the best talent available and that supporting departments have what they need to help the department be more successful.

• Information Technology (IT) exists to give the Marketing Department the daily reports it needs to monitor and analyze the effectiveness of its strategies and tactics.

• The Legal Department exists to help marketers create promotions that are as effective as is humanly possible within established ethical and legal boundaries.

In a Smart Company, the business owner/CEO occupies not one, but two positions:

1. Leading the charge with the Marketing Department – setting goals… monitoring key costs and response rates… helping them innovate new products and sales approaches… breaking logjams… and providing the quick approvals needed to kick winning sales campaigns into overdrive.

2. Taking up the rear – constantly driving everyone down the line to make supporting sales and marketing efforts their #1 priority.

BOTTOM LINE: Dumb Companies think that the Marketing Department exists to sell products. Smart Companies know that the only reason to have a product is to give the Marketing Department a vehicle with which it can attract new customers and produce revenues and profits.

My advice…

• If you own or run a Dumb Company, changing how you and your employees think about your business – the simple act of redefining it as a marketing business and ensuring that your corporate structure and procedures make sales and marketing #1 – is the first step to explosive growth.

• If you’re a marketing exec with a Dumb Company, you’re never going to be as successful as your peers at Smart Companies. If you can’t raise the company’s IQ, pack your bags!

• If you’re a marketing consultant or copywriter for a Dumb Company, finding a better class of clients will send your income skyrocketing.

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