Do CMOs really understand the fundamental nature of their businesses? Not as well as they should.
London-based Fournaise Marketing Group released a study recently where they interviewed more than 600 large corporation and SMB CEOs and decision-makers in the US, Europe, Asia and Australia. In this report, 73% of these CEOs said they felt that their marketing executives lack business credibility and that marketing is not the business growth generators it should be. These CEOs think marketing fails to demonstrate how marketing strategies and campaigns grow revenue by generating more customer demand, more sales, more prospects, or more conversions.
Other — equally dismal — findings include how marketers:
1. Talk too much about brand, not enough about revenue. 77% of CEOs feel marketers talk about brand, brand values, brand equity but fail to link this back to results that top management cares about: revenue, sales, earnings, or market valuation.
2. Chase social media, but can’t demonstrate its impact. 74% think marketing focuses too much on the latest marketing trends such as social media, but can rarely demonstrate how this activity helps them generate more business for the company.
3. Fail to demonstrate marketing ROI. 72% see marketing ask for more money, but can’t explain how much incremental business this money will generate. What’s worse, when asked to increase their marketing ROI, 73% of CEOs see marketing respond with cost cutting ideas stemming from better economies of scale or tougher negotiations with their third-party partners, instead of top-line growth generation like more prospects and sales opportunities.
4. Focus on the wrong things. 67% of CEOs believe marketers don’t think enough like businesspeople: 67% see marketers focus too much on the creative, “fluffy” side of marketing and not enough on business science. These CEOs think marketing relies too heavily on agencies to come up with the next big idea.
Wow, that’s harsh. But not unwarranted.
Two marketers I respect deeply – Carlos Hidalgo, CEO at Annuitas Group, and Lisa Arthur, CMO at Aprimo (now part of Teradata) — highlighted this research in recent blog posts. Unfortunately, it’s the type of information that most marketers “know” intuitively. But it really smarts to see overwhelmingly high numbers demonstrate the depth of the problem.
So how do we marketers get out of this mess? I’ll paraphrase some of Carlos and Lisa’s good advice with 5 practices that you, as a top B2B marketer, should adopt to shift your focus from marketing metrics to business outcomes:
1. Plan and execute marketing programs based on business results. Go beyond metrics that simply show opens, clicks, and response rates by measuring opportunities generated, “influence on sales pipeline”, conversion rates and other metrics that relate to business outcomes. Focus on this outcome-oriented data to learn which marketing activities — and in which combination — produce the best results. Replicate those.
2. Develop lead management processes. Poor process leads to a lack of visibility and open-loop activity that leaves revenue on the table. Instead, put tooling and process in place to help both sales and marketing generate new business opportunities, manage volumes of business inquiries, and improve potential buyers’ propensity to purchase. This will let you increase alignment between marketing activity and sales results and lead to an improved impact on revenue.
3. Use business language to describe marketing results. As the Fournaise survey clearly demonstrates, C-level executives are not interested in the “art” behind marketing. Chief executives want marketing to send qualified leads to sales that generate revenue. Push your team to think about the business as a whole and to communicate marketing’s impact on the business as they see it, not as you see it.
4. Determine what your customers want, not what you are trying to sell them. Most marketing and selling bypasses the customer. Yet, not understanding your buyer makes it difficult to engage them and convince them to buy your product or service. Get to know your buyer by listening to them and learning why and how they buy. This is not easy and never ending; successful marketers make it an ongoing part of the planning, execution, and measurement process by asking “how will this change the nature of our relationship with customers and how will we know we achieved that?”
5. Use analytics to help distinguish signal from noise. While studying customer buying behavior is the micro side of the problem, understanding market and buyer trends is the macro side. Invest in tools and process to help gather and analyze data. And to better understand customer segments and purchase patterns. Then apply these insights to campaigns and show how marketing impacts revenue, earnings, and market share.
In Xerox Global Document Outsourcing Services, we have a marketing team dedicated to analytics, business intelligence, and predictive modeling for the services business. Their goal is to put “analytics into action” by starting with a top-down view of the market and analyzing where the best business opportunities exist for Xerox field sales to pursue — either within existing accounts (by cross selling or upselling new business) or by attracting new logos. Of the many things we do in marketing, this is one of the most vital and important areas and one where the alignment between sales management and marketing strategy is the highest.
What is your experience? Are there other things marketers must do to better align with business and become the revenue generation engine for your firm?