The ten things marketers can do to become a profit center for the business

The ten things marketers can do to become a profit center for the business

By Thomas Bauer, Jonathan Gordon, and Liz Hilton Segel
The ten things marketers can do to become a profit center for the business

The bottom line is irrefutable: marketing can drive productivity and growth for companies that focus on ten key areas. Here’s how it’s done.

Marketing’s “image” problem, if we can call it that, is that traditionally it’s been viewed as a cost center. But we know from research and experience that marketing—as a source of growth and productivity—can be a significant profit center.

A US-based food manufacturer, for example, saw a fivefold increase in revenues over the course of just three years by targeting high-growth micromarkets, while an international telecom player saw a 60 percent increase in return on TV-advertising investment, fueled by the application of advanced analytics to ad-slot selection. A specialty retail client saved 15 percent of marketing costs while increasing revenue by 1 percent without any discernable difference to the consumer.

These examples are inspiring but how do leading companies like these actually do it? The fact is that a clear blueprint for what marketing needs to do to become a profit center has been missing. And that is what led us to do research for our book, “Marketing Performance.”

Through deep analysis of 100s of the best performing companies, we were able to isolate 10 key indicators of success. While no company excelled at all 10, the top marketing organizations perform at par in all areas and outperform their peers in at least three to five of the following 10 areas.

About the author(s)

Thomas Bauer is partner in McKinsey’s Munich office, and Jonathan Gordon is a partner in McKinsey’s New York office, where Liz Hilton Segel is a senior partner.
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