Why Weak Marketing Leads to Bad Fiscal Results


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Weak Marketing leads to poor fiscal results – that is our conclusion.

Here’s how we came to that conclusion:

Since OneSource is a client of Find New Customers, we’re able to use the product iSell to research companies. (We also invite you to visit the superb sales-oriented blog B2B Sales Lounge we write for them.)
iSell is a super product that lets out team quickly and deeply research companies. It’s simplicity and elegance is light years ahead of a better known company with whose name you can figure out with the opposite of Outside (View).
What our research revealed is really interesting. Over time, a pattern emerged in the data, which lead us to a conclusion.

There is a very strong correlation between weak marketing and poor fiscal results.

We see it over and over. Companies without strong marketing leadership suffer most. In a good economy, high margins cover all sins, but in the poor economy of today, there’s no room for error. Pretenders are outed.
Let’s illustrate the problem by checking out the company below. It’s a real company. Here’s a description.

Business Description

Acme is an industrial technology company. The Company designs, manufactures and sells computerized machine tools, consisting primarily of vertical machining centers (mills) and…
Snapshot (USD Mil)
Employees: 390
Revenue: 91.0
Total Assets: 144.7
Net Income: -2.3
Family: 3 companies
Established: 1968
Credit Rating: A+ (100)
Fiscal Year: 31 Oct 2009
Financial Summary As of 31-Jul-2010
Key Ratio Company Industry
Current Ratio (MRQ) 4.10 2.05
Quick Ratio (MRQ) 2.41 1.44
Debt to Equity (MRQ) 0.00 0.50
Sales 5 Year Growth -1.78 12.30
Net Profit Margin (TTM) % -6.09 9.78
Return on Assets (TTM) % -3.93 6.82
Return on Equity (TTM) % -4.88 13.96
show data

Sales: 224.0
FYE Sales Assets
10/31/2005 125.5 94.1
10/31/2006 148.5 125.5
10/31/2007 188.0 163.8
10/31/2008 224.0 177.4
10/31/2009 91.0 144.7
USD (mil)
show data
As you can see, Acme is doing very poorly. (Sales plummeted in 2009.) The accompanying graph in iSell shows declining revenues, profit and employees. They are shedding assets and employees quickly.
Why are they struggling so? To get that answer, we need to do a deeper diagnosis.
Here’s a clue. Look at executives on their website. You see a “manager of marketing” but no VP of Marketing or Chief Marketing Officer.
They have plenty of other executives:
  • CEO
  • VP’s of Sales – even an EVP of Worldwide Sales.
  • A VP of Customer Service too.
  • Manager of Marketing.
    In my experience, a “manager” is a relatively junior position.
Here’s my theory. Without strong and innovative marketing, there is nothing to attract empowered buyers. (Check out Inside the Mind of the B2B Buyer for an explanation.) Few sales leads means few sales. Few sales means terrible financial results.
If my assumption is correct, the lesson for businesses is clear.

If you want to prosper despite a miserable economy, you must have a strong and innovative marketing leadeR

who can implement the 6 keys of marketing success.
What do you think? Do you see the same correlation? We love comments and people who share our blog posts via social networks.

Republished with author's permission from original post.

Jeff Ogden
Jeff Ogden (http://jeff-ogden.brandyourself.com) is President of the Tampa based Find New Customers demand generation agency. http://www.findnewcustomers.com .


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