As we write this article Kiplinger’s has published their July Economic Outlook Report declaring that “by late fall, we expect corporate purse strings to loosen modestly enough to accommodate more investment.” As companies continue to focus on and invest in growth, it will not be surprising that the leadership’s team expectations and pressure on Marketing will rise. When we ask the question, “Would you like to know how your Marketing is impacting your business?” there’s not a CEO we work with who doesn’t answer with a resounding and unequivocal yes.
What we have come to understand in our work with CEOs like you is that it really isn’t about money as so much understanding value and impact. And what we learn from our work is that many marketing organizations may visually present some data or visually provide a status report, but for the most part, the C-Suite is still waiting for Marketing to help them make strategic decisions and understand what is and isn’t working. We understand that you want the right metrics displayed in a usable actionable way. There are five fundamental steps every CEO can encourage, support and demand to optimize marketing.
Understanding the impact of Marketing on your business, starts with measurement. This initial step is to the essential ingredient for performing useful analysis needed to optimize your marketing efforts. You really cannot optimize your marketing by skipping measurement and analysis. Measurement and metrics are the foundation. Marketing needs these two basic elements to present actionable data and develop models to support fact-based decisions. But your marketing organization cannot operate in vacuum. It needs input from the leadership team to make headway. Here’s how the C-Suite can help:
1. Enable Alignment
Our research over ten years reveals that marketing organizations that align their efforts to the business are perceived as having the greatest impact on the business. Most people come to work every day wanting to make a difference. If they don’t know what to do, they will work on something. Marketers are no exception. The best marketing organizations create direct line of sight between marketing activities and business outcomes. Setting a revenue target is one thing, but it is not a business outcome. Marketers don’t market to buckets of revenue. As the CEO, your marketing organization needs clarity around how this revenue will be derived. That is, Marketing needs to understand how many new customers need to be acquired and ideally from what markets, how many existing customers need to be retained, and if there is a churn issue what’s causing it. What customers do you need to grow and will this growth come from existing or new products? With this information they can develop and align marketing activities properly.
2. Collaborate on Metrics
Today, marketers have so many tracking tools available to them, many of them free, that they can virtually track hundreds of things- from website visitors, to twitter followers, to email open rates, etc. We find that many marketers are drowning in data. So the challenge isn’t measuring, but measuring what is meaningful. By starting with the business outcomes and aligning marketing efforts with these, marketers can focus on metrics that matter to you and the rest of the leadership team. Mapping marketing metrics to outcomes improves the quality of the marketing objectives and facilitates collaboration and agreement between Marketing and the leadership team. People perform to how they’re measured. So if the metrics are based on activity- such as traffic to the website, open rates, etc. that’s what you’ll see even if that’s not what will help the business. There’s no silver bullet marketing metric. No single measure, such as ROI, completely encompasses the value and impact of marketing. More than likely you will want a mix of financial and nonfinancial metrics, such as number of qualified leads, rate of customer acquisition, cost to acquire, cost per lead, marketing win rate, pipeline contribution, share of wallet, customer retention, referral rate, etc.
3. Expect Performance Setting and Tracking
With alignment and agreement on metrics, enforce a strict policy of setting performance targets to support marketing objectives and metrics for all marketing activities. Replace broad brush targets such as increase awareness, grow share, keep customers, and do more business with existing customers with specific quantifiable targets for objectives. Expect marketing to have a performance and cost target for every marketing activity such as some number of new contacts, new conversations in play, new qualified leads, number of demos, number of trials, number of samples, cost per contact, cost per lead, etc. Then expect Marketing to track and report on the performance and costs. Keeping track of your marketing costs and results by marketing objective, program, channel, geography, segment and medium can greatly improve your ability to understand the effectiveness of your marketing investment. Store the results in a data base so you can use the information to help set targets in the future. This step is about having the discipline to consistently establish performance targets and capture marketing performance. It is at this step you can truly begin to understand the value and impact of Marketing.
4. Require Analysis and the Use of Analytics
Now that you have performance data and repository of results you will be able to leverage analytics. Analytics enable companies to make decisions related to business operations, competitive moves, staffing and skill requirements, customer strategy, positioning and messaging, and of course marketing optimization. As Dave Frankland of Forrester once said, “The goal is not to collect data, but to develop insights.” Insights are the purview of analytics. Analytics are algorithms advanced and/or mathematical techniques on large volumes of data that help marketers translate data into actionable insights to help drive marketing and customer strategies and optimize marketing efforts. It is at this step you begin to build models to help you answer “how likely” types of questions, such as, “how likely will this group of customers adopt this new product”, or “how likely will this group of customer respond to this offer”, and so on.
5. Request a Marketing Dashboard
We’ve seen all sorts of marketing dashboards, from the bad, the ugly to the good. A dashboard is more than just a visual representation of data. A good dashboard is actionable. It visually reflects the output of the measurement efforts and enables you to make decisions. A dashboard is typically populated with the metrics. In fact, the design of a dashboard usually leads to a conversation that entails the first two steps and captures the data in the third step. A good dashboard answers two questions: So What and What’s Next. So What, that is what we received for the effort, and what difference it made to the company. What’s Next, that is, what are our options knowing what we know. Marketing dashboards should be a catalyst for decisions and action. If you can’t do that with what your marketing organization provides you, then it needs to be revamped.
In addition to optimizing your marketing, implementing these five steps with your marketing organization will keep Marketing from getting too far adrift from the C-Suite’s priorities. It will also ensure the Marketing investments are connected to the overall strategy of the company. Learn more about how to optimize your Marketing.