How do we define
marketing?

I met a long term client for a quarterly review. While having a much needed ‘brain break’, they confessed simply "If I'm honest I don't actually know what marketing is".

Puzzled, as we were well beyond the stage of defining terms, I moved the conversation on. Reluctant to admit I didn't have a good definition either.

That night I referenced my dictionary.

1. The Oxford definition

The Oxford definition focuses on a three-pronged framework:

• Promotion and Sales: the basic act of promoting and selling products or services (allied with advertising).
• Relationship Management: the structured process of managing the relationship between a firm and its customers by organising the demand for, and supply of, a product or service.
• Strategic Distribution: using target audience research to determine the most effective ways to promote and distribute goods.

Unsatisfied, I then looked up an alternative definition.

2. The Cambridge definition

The Cambridge definition focuses heavily on the operational and commercial lifecycle of a business activity. It outlines it as:

• Customer Insight: finding out exactly what customers want.
• Product Design: using that collected consumer data and information to actively design targeted products and services.
• Effective Selling: executing strategies to sell those products effectively to the target audience.

When asking business leaders or company directors to define marketing, the answers usually revolve around promotional channels: social media campaigns, paid ads, SEO audits, print flyers, or email blasts.

Now with six separate definitions, two of which stand in opposition, I found myself further away from the goalposts. So like any modern practitioner I took to r/marketing and asked a cohort of self proclaimed experts. Between the jests and snarky comments, I found two answers I liked.

Market, as a noun

A clear way to understand marketing is to break the word down to its core noun: Market, or more accurately, the Marketplace.

In the process of "marketing" a product or service, you are simply developing its go-to-market strategy. This encompasses three distinct phases:

• Bringing it to the marketplace: how you launch and position your offering relative to existing alternatives.
• Representing it while at the marketplace: how your brand, messaging, and proposition communicate value directly to buyers.
• Ensuring dynamic retention: making the experience memorable enough so that when you next return to the marketplace, an audience is already waiting.

If you are running an active business, you already have a go-to-market strategy. The real strategic question is not whether you are marketing, but how strong your go-to-market strategy is compared to your competitors.

If your product or service is technically superior, but a competitor with a weaker offering is winning market share, the explanation is simple: their marketplace representation is better.

Creating the urge in someone to buy

An equally simple way to look at marketing is through the outcomes it intends to achieve.

In the process of "marketing" a product or service, you are facilitating someone voluntarily making a trade of goods or services for capital.

Satisfied with my answers, I headed to bed. Pondering a new question: how do we define ‘good’ marketing?

Fortunately, in this case, I was able to find a satisfactory answer bouncing around my head.

The financial definition: measured marketing success

Real marketing leadership replaces guesswork with systematic tracking. Regardless of which channels are deployed, directors should evaluate the effectiveness of marketing through a primary financial ratio, such as the Customer Acquisition Cost (CAC) to Lifetime Customer Value (LTV) ratio.

To get you up to speed, the preferred method to evaluate marketing performance effectively is to track three clear variables:

• Customer Acquisition Cost (CAC): exactly how much money and resource it costs to secure a single paying customer.
• Average Lifetime Value (LTV): how much that customer spends over the entire course of their relationship with your business.
• Customer Retention Horizon: how long a customer stays active from their first purchase to their last.

When including the cost of the marketing leadership, this equation should seek long term to reach a 1:3 return on investment with a moderate customer retention horizon. This would be good marketing.

The gut instinct definition: bums on seats

Data is only as good as its tracking, and if the one reporting the data stands to gain from the data suggesting a favourable output, then the data is inherently biased. This must be acknowledged.

So then, how do we determine in an unbiased way if marketing is working?

Simple, the key performance indicator. When combined with a SMART goal, a KPI is the most effective way to track whether your marketing is succeeding. By clearly defining the expected output from your marketing department you can reliably determine whether your marketing is good. Better than that, you can grade its performance on a scale.

This was figured out long before my time. KPIs and SMART goals are the most commonly used diagnostic method across corporate Britain and corporate America to track the performance of staff throughout all sectors, and marketing is not unique to this tracking. There is more on setting marketing KPIs and SMART goals in its own article.

Now content with my definitions, the inverse of bad marketing made evident by default, I was able to fall into a deep sleep. Waking up early for my next client's quarterly review.