Marketing means Commercial management


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The Chartered Institute of Marketing defines Marketing as “the management process that identifies, anticipates and satisfies customer requirements profitably”. Thus Marketing is the name of the commercial management process that produces profitable income, which is the sole purpose of any business. Unfortunately, the frequent and general misuse of the word “marketing” as another word for selling, advertising, or other communication, has led to the subsequent erosion of its meaning and to difficulties in quantifying its contribution to a business as a whole. You cannot measure what you cannot define. However, replacing the word “marketing” with the term commercial management, provides clarity to the definition of this specific management process.

The contribution of commercial management to any business, is to be found in the generation of profitable revenue. Without that profitable revenue there can be no sustainable business. Thus the contribution of commercial management must ultimately be measured by the amount of profitable revenue generated. That is not to say that brand awareness, market penetration, customer retention and many other aspects of the business development process are not important, but ultimately, the purpose of all the elements of business development is to generate a continuous profitable revenue stream for the business. Thus the amount of profitable revenue generated together with the efficiency of the use of assets and investment, must be the primary measures of commercial management performance.

Much of what has been written on the subject of measuring commercial management performance tends to have concentrated on particular areas, principally customer relationship management data (CRM), the return on investment in advertising, brand awareness and market penetration. For the brand manager, the advertising manager and those involved in CRM data management, performance measurements in their respective areas of responsibility are all important.

The purpose of measurement in commercial management, as in any other facet of business, is to establish the level of results derived from the execution of business development plans. Metrics, measurements and bench marks act as indicators of performance and as a guide to necessary future action, but confusion often arises over understanding the differences between these terms.

Metrics are the standards for measurement, providing target values that a company must achieve to reach a certain level of success. Measurements are the raw outcome of a quantification process, such as a company’s numbers, ratios and percentages, while Benchmarks are the very best measurements to which to aspire, the standard by which all others are measured. Unfortunately, many people misuse the word “metrics”, when in fact they mean measurements or management ratios, which creates confusion and uncertainty.

Marketers often complain that business development measurements are not actually very informative. If that is so, then the wrong things have been measured. Choosing the right things to measure is dependent on what needs to be known in order to make informed decisions. Collecting volumes of business development measurements achieves nothing, if the information does not directly assist in informed decision making.

Marketers are getting better at measuring the performance of specific customer related activities. However, except for specialist response advertising, most advertising campaigns cannot be linked directly to specific sales. Brand awareness, market share and other measures all have a certain importance, but all the separate activities that are involved in producing income from customer satisfaction are interdependent, collectively contributing to the overall contribution of commercial management, so that business development performance must be measured as a whole.

The purpose of any commercial business is to make profits for the benefit of its shareholders and employees, by satisfying customers. The commercial manager is responsible for producing sustainable profitable income for the business, and to have responsibility for all those activities involved in its production by satisfying customer demand. It does not matter how good the business development strategy, the promotional support, the advertising campaign, the market research, the customer relationship management programme or anything else is, if the business’s sales organization cannot close the sales, then the revenue cannot be realized. The objective of the commercial manager is to maximize profitable revenue while minimizing costs and the use of assets. To achieve this, he or she must understand all the activities involved in getting and maintaining business by asking questions, avoiding assumptions, and seeking quantifiable proof of achievement through performance measurement.

Effective management is necessary to convert business development plans into actions and to achieve results. The continuous monitoring of those results provides indicators that, highlight success, failure, as well as identifying problems. For the commercial manager, performance measurement is an essential tool of management by which the contribution of every customer related activity is measured. But such measurements are only indicators of performance. Converting business development plans into successful actions requires the commercial manager to inspire, motivate and direct those staff responsible for carrying out the separate tasks in order to reach their initial objectives and encourage further achievement. It is only the effective leadership and management of all those activities that collectively satisfy customer requirements profitably that will determine the level of overall commercial success.

©N.C.Watkis, Contract Marketing Service 08 Jun 18

Nicholas Watkis, AE MA DipM CMC FCIM
Nicholas Watkis set up Contract Marketing Service in 1981, providing professional interim marketing management for a wide variety of businesses. Over 30 years practical experience in organizations, large and small, national and international, led to the development of Business Performance Maximized specialist in marketing performance measurement.


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