Marketing, communications affects bottom line

If this integrated package is devised and effectively optimised, clients will discover their marketing and communications budget is recouped through operational savings and economies of scale. Of course, this assumes the client’s company as a whole buys into the package and continuous improvement becomes a focus.

In traditional business thinking, if a company needs to improve profitability, it throws marketing budget at the problem. This will most likely work, but is equally likely to result in production being put under pressure to meet the demands of the extra business coming in, either increasing costs further or resulting in a decrease in quality and service levels.

A lack of profitability is often the result of an incorrect financial structure and inefficient operational processes. No matter how much additional business is brought in, if these processes remain unchanged, costs will simply grow in accordance with the increase in income, as will the resultant bottom-line losses.

Streamlining and optimising operations

Streamlining and optimising operations will normally reduce losses and place the company in a better position to achieve profitability, if it does not immediately save enough to put it in the black. Of course, when we mention operations, we include all areas of corporate operations, such as HR, finance, production, supply chain, quality management and IT.

When embarking on an integrated re-engineering of marketing, communications and operations, the following results are certain:

• Costs will go down as operational process efficiencies improve,
  
• Marketing will be done at a much lower cost and will prove more effective, and
  
• Operations and marketing will be synchronised with each other as well as with company strategy.

An integrated approach provides keener insight into the business and will therefore also prevent an over-, or under-, selling scenario from occurring. If marketing undersells, costs will soar as the company has to pay for unused storage, an over-capacity in human resources, opportunity costs and so forth.

A worse scenario is when marketing oversells and production cannot fulfil the resultant demand. The outcome in this scenario will be unhappy customers, a lack of quality and lost brand integrity – none of which are easy or cheap to recover from.

This methodology will also ensure that what is sold is in line with what the company can actually deliver. We all know about the entrepreneur who promises the moon and stars to get business, forgetting that his company does not have the capacity to deliver. Efficient operations allow companies to under promise and over deliver every time.

Work towards a common goal

The bottom line is if marketing, communications and operations are integrated in line with company strategy and are working towards a common goal, the business will achieve operational and service excellence. In real terms, this means it is operating at the ideal capacity with no losses due to the employment of unnecessary resources, while marketing sells exactly what the company can produce at maximum efficiency and quality – and at the lowest cost possible – resulting in a real, positive effect on the bottom line.