Mr. Muhamed Muneer

Many companies in India and elsewhere in the world swear by them; many books have become best sellers because of them.  So much so that these two phrases have become clichéd today. What I am talking about are the two quality-related phrases: TQM (Total Quality Management) and the Six-Sigma Approach. No, I am not here to elaborate on them; most of you are already practising them, at least the TQM. I intend to tell only one thing about these approaches: They have something to teach about waste.

Believe me, waste is evident in virtually every company, and marketing budgets of small firms are not exempt. I have found this woefully true when assessing a new client's circumstances. Although small firms enjoy more flexibility, they often manage their precious marketing resources haphazardly. As long as the company's sales are adequate, no one looks for marketing budget waste.

This does not spell disaster in the near term, but like a gradual rise in blood pressure, it can get out of hand at the wrong time. Here are some common areas of waste I have discovered.

1.  Emotion over logic:- This problem is rarely easy to solve. Emotion is frustrating when owners or senior managers will not let go of a company tradition, or when they continue to pour money into something that pays more in personal satisfaction than sales.

A good example: Continuing to associate as sponsor of a popular event when it is long since ceased to pay off. The personal satisfaction problem is evidenced by the boss who continues to buy ill-advised outdoor media space because he drives past it every morning.

Sometimes the professional marketing staff simply cannot overcome superiors' emotion with logic. The best hope is presenting a tangible alternative, complete with projections for ROI. When confronted with a specific idea that smells of money, most bosses will reluctantly abandon a sentimental loser.

2.  Direct marketing inefficiency:-  Like marriages made in heaven, ideal direct marketing programmes demand meticulous attention. Too often the 80/20 rule of Perot is not applied to mailing list purchases, list purging, telemarketing calls, and sales trips. Marketing managers and directors who wear too many hats often are distracted by tasks that appear far less important than contact efficiency.

3. Questionable return on advertising:-  Certainly, any marketing professional knows that few advertising expenditures deliver stellar results overnight. However, many small firms leave programmes in place too long because they do not take time to research the ever-changing alternatives. A good example is a long-standing ad in a magazine "we cannot afford not to be in," when a Web page now suggests a better payoff.

There is also another type of waste: That of spreading resources too thin. For example, one should never attempt to go for a national launch of a product without adequate resources to support it. Too often, temptations are there to go national: Your R&D has brought out a great product, the summer is the peak season for the product, there is only one major competitor, the sales force wants the product in each of their markets immediately, they are confident of moving the stock without much support, …… the list goes on. But do not heed to such temptations.

Without adequate resources to communicate to target consumers about your product, there will be hardly any pull and retailers will quickly label your product as a poor product, however good your product may be. The same sales force that urged you to launch the product will accuse the marketing department for not providing enough support, and you finally will have an early death of your great product. Examples abound. The resources are clearly being wasted in such cases. Always go for regional or state-wise launch if resources are not sufficient.

4. Lacklustre return on marketing staff:-  Team spirit aside, every member of your marketing staff should be expected to provide specific results for each one's salary check. Each person's job description should include realistic, time-bound, and most important, quantifiable objectives. Performance evaluations should set goals, and staffers should be held accountable for attaining them.

It is easy to measure salespeople's and telemarketers' performance. The challenge is figuring out how to measure that of other marketing staff. PR and corporate communications people might be judged by the number of column inches of exposure. Order entry personnel, though not always perceived as marketing staff, should be reviewed for number of errors, speed of order expedition and customer retention.

If nothing else, the whole marketing department can be judged based on its annual cost as percentage-of-gross-sales.

Though less vocal these days, the quality movement has convinced me that all performance, both of people and capital, can and should be measured. Otherwise, you can assume an average 25% waste factor. It is important to recognise that in marketing, TQM is not just about award-winning graphic design and advertisements, or ideal placement of your trade show booth. It is about overall return on budget. In the final analysis, ROI is all that matters in business - and increasingly in the non-profit sector.

(By arrangement with Innovative Media)

Feedback and queries may be e-mailed to him directly at muneermuhamed@hotmail.com