Most of us have likely heard of short-termism in terms of markets, investments and even as one of the causes of the recent economic crisis.
For a long time, business leaders have been focused on delivering immediate profits to shareholders without thinking about the long-term impacts of their actions.
Unfortunately, short-termism has become an 'entrenched feature' of British business, according to a recent report for the Labour Party: it has become so pervasive that it now influences the way most departments act within businesses - even those not directly connected to accounting or investment.
Short-termism in marketing
Marketing is a prime example of where short-termism - a focus on quarterly budgets and monthly lead conversion - rules even at the risk of long-term costs.
The problem is that the narrow focus of short-termism does not maximise profits by thoroughly tapping customer loyalty and satisfaction opportunities, but instead leads to customer churn, which destroys loyalty and strengthens competitors while raising customer acquisition and maintenance costs and lowering profitability. - The Marketing Century
Trust takes time to build
The aim of marketing shouldn't be to make a quick sell; rather it's about establishing yourselves as trusted advisors. You want potential customers to come to rely on you for advice and answers so that when they come to search for the product or service you sell, you are the obvious choice (and continue to be so as they upgrade or grow).
'When customers can share their experiences electronically with millions, customer trust becomes a business necessity—and a divining rod for any company‘s long-term success,' argue Peppers and Rogers in their recent battle-cry against short-termism, Rules to Break and Laws to Follow.
Thinking purely about getting in enough leads to convert this quarter means you are focusing too much on those customers near the bottom of the sales funnel and ignoring all those potential folks that could be filling up the top of the funnel. Of course, ignoring them means each quarter it will become harder to fulfil those conversion quotas as you've built up no real base to nurture them from.
Relationships have to be maintained
Short-termism in marketing also tends to mean you are focused on luring customers in and pay no attention to them once they've signed on the dotted line. In fact, it is six to seven times more expensive to attract a new customer than it is to retain an existing one, meaning if you were to look ahead a little you'd see that today's customer could be tomorrow's repeat customer, or upgrade opportunity. That's when you'll realise they're worth paying attention to.
Delighting customers with relevant educational material and targeted advice means investing in copy and collateral that may not bring a return for a few quarters, maybe even a year or two, but when it does come, that return could be a lot higher than any short-term customer acquisition tactic's return.
Content marketing combats short-termism
'The grandees of marketing, people like George Day, Philip Kotler and Ted Levitt taught companies how marketing must create value for customers before it can create value for shareholders five decades ago,' says Graham Hill.
The increasingly popular practice of content-driven inbound marketing brings the focus back to value for the customer and potential customer. Content isn't created with products or features in mind, but education, advice and a genuine interest in making your buyer personas' lives easier, more productive and more profitable.
It's about relationships, trust and loyalty.
Gradually broaden your horizons
Switching from short- to long-term thinking in your marketing strategies won't be easy. Most likely it will be a gradual process of building up collateral and starting to track your leads and customers over the entirety of their research and buying journey. It will also require a stronger, more collaborative relationship with sales and developing reports that detail return on investment on a longer (but ultimately more profitable) timescale.
Take comfort though: it might sound hard, but overcoming short-termism in marketing is worth it. As addiction specialist Chris Johnstone says:
Addiction is a pathological attachment to something attractive in the short term, but destructive over time. Recovery is about looking where we're going and choosing a path that can last.