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11 December 2010

The Revenue Man

Tag(s): People

Procter & Gamble where I started my career is well known as a breeding ground of future chief executives. So it was no surprise when in 2001, Mike Clasper, after a very successful 23 year career with them in which he rose to become president of global home care and new business development, left to join BAA as Deputy Chief Executive later becoming Chief Executive. After Ferrovial took over BAA Mike moved to EMI and became a part of the Terra Firma acquisition. He is also non-executive chairman of Which and a non-executive director of ITV. He is a founder member of the Corporate Leaders’ Group on Climate Change and was a member of HRH The Prince of Wales’ Business and the Environment Programme from 2003-07. He received the CBE in 1995. These are all career moves that you might expect of a P&G man.

But in 2008 he became chairman of Her Majesty’s Revenue and Customs (HMRC). In this job he has the responsibility of collecting £540 billion of taxes and duties from all of us, individuals and businesses. This week I attended a dinner of Fellows of the Marketing Society where Mike was the speaker.  Mike is originally from Sunderland and tells it straight. He stated that we are not good at marketing in the UK. Marketing should be at the heart of value creation but instead has been marginalised in many businesses to being in charge of marketing communications. This was music to my ears as I have been saying the same thing for many years and it is one of the themes in my book “The 20 P’s of Marketing” which I publish on this site on a monthly basis.

Mike believes that good marketers should be curious about the rest of the organisation, particularly finance and look to gain experience of other areas of business.  With these lessons they can influence the whole organisation. At BAA he set out to create a character statement for each airport. With this personality established an appropriate design was agreed and briefed to the architects. The key to airport profitability is the retail performance but most people arrive in a state of maximum anxiety and, Mike stated, people who are anxious don’t spend much Wonga in the shops. (Here I had to part company with Mike for the only time in his speech and, as I told him afterwards, my wife is a particularly nervous flier but has no trouble in wielding her credit card in the airport boutiques.) Apparently 50% of airline passengers only fly once per year.

Mike and his team, which also includes some experienced consumer marketers, have taken this philosophy into HMRC. This part of his speech was under Chatham House Rules but suffice it to say that the classic technique of customer segmentation has been put to good use and we are segmented into seven segments ranging from those who are willing and able to pay our dues to those who are downright criminal. With this segmentation, rather than a structure based on more superficial sectors, HMRC is able to reach potential delinquent taxpayers through intuitive connections with influential peer groups.

A vigorous debate developed about Mike’s central proposition that Marketing in the UK has become marginalised. Many agreed with the thesis while others tried to defend the situation. Others quoted good examples of best practice. My view is that such best practice is usually deep rooted in those organisations like Procter & Gamble and yes, whisper it quietly, Unilever where it has been this way for decades. Many retailers led by Tesco have also rooted it deeply in their culture. Such organisations rarely use the word marketing in their titles. Managers will be in charge of brands or products or product groups or stores or trading or other hard expressions of business activity. While for me Marketing covers the whole ground of value creation through customer satisfaction for still too many organisations it is a department of the company where marketing communications are carried out. Worse such activities are seen as mere cost centres rather than a drive for profit.

Still too many Boardrooms are focused on the lines in the P&L relating to cost. They should spend as much time as possible on driving the top line, not without ensuring it delivers positive bottom line results, but always understanding that sales growth will take care of many problems. The same might be said for the economy at large and ironically Marketing has penetrated one of the least likely bastions in the shape of a dyed in the wool P&G man at the top of Her Majesty’s Revenue and Customs.

 

 

Copyright David C Pearson 2010 All rights reserved




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