The MacKellar Memo | March 2023

Let’s Talk Business

As marketers, we've all been in meetings where we've been asked questions about our clients' businesses that left us feeling like we were in the middle of the debate in Billy Madison. For those who haven't seen the movie, Billy is asked a question during a high-stakes debate and gives a nonsensical answer that leaves everyone scratching their heads. We've all been there, right?

But the truth is, when we're working with clients, we can't afford to give nonsensical answers. We need to have a solid understanding of their business and their industry to create effective campaigns that will drive growth and support their long-term success. Without this understanding, we risk providing subpar service and even doing harm to our clients' businesses.

Take, for example, a client in the healthcare industry. If we don't understand the nuances of their industry, we may create campaigns that run afoul of regulatory requirements or that are not in line with industry best practices. This could lead to legal issues or reputational damage for our clients. While we use healthcare as an example in this post, the same type of regulatory issues are present in a number of industries. 

On the other hand, if we have a deep understanding of our clients' business concepts, we can create campaigns that are perfectly tailored to their needs. For example, if we're working with a startup that has a high customer lifetime value (CLV), we can create campaigns that focus on customer retention and loyalty to maximize their value to our client. By understanding the key business concepts that drive our clients' success, we can create campaigns that are more effective and impactful.

As Billy himself said, "I'm sorry, I don't know the answer. That's why I need your help." This quote perfectly illustrates the importance of understanding our clients' business concepts. If we don't have a clear understanding of their business, we need to be humble enough to admit it and seek out the information we need to do our jobs effectively.

So, what are some of these key business concepts that we should understand? Let’s take a look at a few.

Customer Lifetime Value (CLV)

Customer lifetime value is the amount of money a customer is expected to spend with a business over the course of their lifetime. This is a critical concept to understand because it allows us to identify the most valuable customers and create campaigns that will encourage them to continue doing business with our clients. For example, if we know that a customer has a high CLV, we might create a loyalty program that rewards them for their continued business. On the other hand, if we know that a customer has a low CLV, we might focus our efforts on acquiring new customers who have the potential for higher CLVs.

Revenue

Revenue is the amount of money a business earns from selling its products or services. This may seem like a basic concept, but it’s important to understand because it allows us to measure the success of our marketing campaigns. If our campaigns are successful, they should drive revenue growth for our clients. By tracking revenue, we can see if our campaigns are having the desired impact and adjust our strategies accordingly.

Industry-Specific Legislation

Taking the healthcare example further is HIPAA, or the Health Insurance Portability and Accountability Act, is a federal law enacted in 1996 that establishes national standards for protecting the privacy and security of individuals' personal health information. HIPAA is particularly important for healthcare providers who engage in marketing activities, as it regulates how these entities can use and disclose patients' medical information for marketing purposes. Under HIPAA, healthcare providers must obtain written authorization from patients before using their health information for marketing purposes, and they must provide patients with the option to opt-out of receiving any future marketing communications. This means that healthcare providers, or those acting as a proxy for healthcare providers (read: marketing agencies), must be very careful when it comes to marketing their services to patients, as they must ensure that they are complying with HIPAA's strict requirements. Failure to do so can result in significant fines and penalties. Ultimately, HIPAA's privacy and security requirements help to protect patients' sensitive medical information and ensure that it is only used in ways that are consistent with their wishes and expectations.

By understanding these core business concepts, we can create more effective marketing campaigns that are aligned with our clients’ overall business objectives. Additionally, understanding these concepts allows us to provide more strategic guidance to our clients and help them make more informed decisions about their businesses. So, let’s take the time to learn about our clients’ businesses, and let’s use that knowledge to create campaigns that truly make a difference.