Reviews
In the final analysis, every company is dependent on its customers and its ability to sell profitable products or services to those customers. It is estimated that companies in the United States spend upwards of $250 billion annually in carrying out the marketing function, which includes identifying customers and motivating them to buy. Improving the return on this massive investment would have incalculable impact on any company. For example, automobile manufacturers introduced remarkably successful programs to provide “no-cost” financing to buyers. Sales shot up and the program seemed a success--but only if all you measured was sales volume. When the companies measured overall profitability, it turned out they were losing money in the short-run and, even worse, had conditioned customers to wait for the next “deal” before buying a car.

In High Performance Marketing: Bringing Method to the Madness of Marketing, author Naras Eechambadi, founder and CEO of Quaero Corporation, a well-known consulting firm that focuses on improving marketing performance, the real importance of marketing in relationship to the customer; he recognizes that the customer is of paramount importance to every company and marketing has the best insight into customer demands. He does not overlook the importance of financial management, however, putting great emphasis on systems, and systems improvement, that can only be accomplished through joint effort.

While perhaps an overly simplistic summary, the author has developed a six-prong graphic to visualize the interdependence of strategies, processes, organizational alignment, technology, information assets and measurements. As one can see, at least half of the items are definitely within the purview of readers of this magazine. If we had to put the author’s suggestions in a single sentence, it would be “Plan your marketing strategy, measure performance of that strategy and hold managers responsible for that performance.”

While this book is written primarily for marketing executives, the real audience should be management accountants and finance professionals. These are the people trained in measurement and reporting who can most easily implement the author’s recommendations. Further, by partnering closely with marketing, finance professionals can enhance their personal career development. While in theory it may be easy to teach a marketing manager sufficient accounting to measure performance, in practice a qualified finance manager will more quickly absorb the requirements of marketing analysis.

The book is chock full of real-life examples and case studies, very few of which are disguised. It reads easily and has literally dozens of nuggets of good ideas. Any reader of Strategic Finance who wishes to enhance his or her career would do well to get a copy of the book, read it, and then start to ask the tough questions about marketing expenditures. Whether you are dealing with performance measurement, capital budgeting, cost accounting, or expense budgets, this book will help you do today’s job better. More importantly, it will be the stepping stone to enhanced responsibilities within your company. General management requires expertise in marketing as much as, if not more than, finance.
Eechambadi will be a featured speaker at the forthcoming IMA Annual Conference in June 2006.

Alfred King
Strategic Finance magazine, January 2006

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