Marketers frequently talk about “quality,” “value,” “strategy,” “performance,” “reputation,” “position,” and “branding”—all of them important concepts.
However, your president, CEO, CFO, and other members of the executive team are talking about “assets,” “return on assets,” “velocity,” “leverage,” and (if you work in a publicly owned company) “P/E multiple” and “firm value.”
All those words make up a company’s common language.
As I mentioned in my previous article (Proving Marketing to Execs – Part 1), you have to translate marketing into the language of business to get more respect from the C-suite.
But Marketing has another problem—the basic way marketers use marketing language.
Marketing’s Other Language Problem
Every business function has its own specialized vocabulary, but when marketing professionals from different parts of your company define marketing in different ways, you create confusion and skepticism among others in your company.
You can understand why the credibility of marketers can be compromised when marketers from two different divisions use the same words but mean different things by them. The resulting confusion becomes especially harmful when marketers interact with managers from other parts of their organization (such as R&D, Finance, and Sales) and even other companies (e.g., advertising agencies).
In some ways, the problem is unique to marketing. Accounting and finance, for example, have standardized languages. “Net present value,” “assets and liabilities,” “cash flow statement,” etc. all have standardized meanings. The definitions for those areas of business come from Generally Accepted Accounting Principles (GAAP).
Marketing does not have such principles. Confusion over the meanings of terms leads to confusion over what the marketing department’s strategy is and how that strategy should be executed.
For example, a marketing practitioner may say, “Let’s put our value proposition into that product brochure.” But “value proposition” means different things to different groups and people in a company.
Your VP of Sales might view the value proposition as the price of a product or service relative to the price of competitive offerings. The VP of Engineering might offer yet another understanding of the product’s value proposition, such as how efficiently it can be produced relative to competitors’ offerings.
The same confusion arises when people use the word quality. When you say “quality” in your company, what do you mean? Product reliability? The attractiveness of a product brochure? Something else entirely?
Moreover, do other managers with whom you discuss “quality” give the term the same meaning you do? And what about your customers: How would they define “quality”? Often, the word means something different to each customer—further muddying the waters about what constitutes a “quality” product or service.
Another confusing expression is “reputation.” To some people, reputation refers to a company’s brand equity. To others, reputation signifies what a brand is good for. The problem is that you can have a reputation for anything: a reputation for reliability, or good service, or just for being a nice person.
“Image” is another tricky term. Some managers use “image” to refer to the picture consumers see in their heads when they think about the brand (for example, the physical product or its logo). Other managers talk about “image” in terms of advertising. For instance, an “image ad” doesn’t contain much information about the product; rather, it associates the product with a certain type of person or lifestyle.
So how do you avoid the problems described above?
Start by gathering your marketing team together and listing the marketing terms you use every day. Then arrive at agreed-upon definitions.
To persuade people to invest time in the meeting, explain to them beforehand the importance of clarifying vocabulary. Cite the benefits that will arise from developing a shared understanding of each term’s meaning, such as more generous support for marketing initiatives from the C-suite, or a greater willingness to provide feedback on proposed marketing strategies.
Consider this as well: Avoid using words such as “value,” “quality,” and “reliability” (or pick your favorite ambiguous term) that have different meanings for different people in your company and that can be interpreted in broad and often confusing ways. Instead, use words for which people across the organization can agree on their meaning.
Translating Your Activities Into Business Language
Because they’re already part of the company’s financial language, use financial terms such as “velocity” and “leverage.”
Technically, “velocity” is the number of times a company’s products or services are sold and replaced with new inventory in a given time period. But your marketing activities—such as promotions and price reductions—are actually increasing velocity. Indeed, the whole point of those activities is to sell more products and services as quickly as possible.
The more you can show execs how your work enhances velocity, the more they’ll see the connection between marketing and measurable financial performance.
“Leverage” is a company’s ability to use someone else’s assets to produce cash for itself. The language of business includes a variety of risk-related terms (“business risk,” “financial risk,” “risk averse,” “risk neutral”), but for our purposes the word “risk” refers to the possibility that a marketing investment’s actual return will differ from the expected return.
So, let’s say you want to use a brand to extend into a new market. You can say instead that you want to leverage the brand to enter the new market. Whenever you have an asset (even one that is intangible) that you want to use for something else, you are engaging in leverage.
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By creating a common language of marketing, you introduce efficiency in your marketing meetings. Equally important, you generate coherent marketing strategies that everyone can understand and execute as intended. Finally, you will find it easier to translate the vocabulary of marketing into the language of business used by high-level executives in your company.
This article was adapted from the book Marketing Champions, co-written by Roy A. Young, Allen M. Weiss, and David W. Stewart.
Find Part 1 of this two-part article series here. https://www.marketingprofs.com/articles/2021/44769/proving-marketing-to-execs-part-1
More Resources on Marketing Terms in Business
This article first appeared in www.marketingprofs.com