It’s time for CMOs to stop marketing from being judged on superficial design activity and isolated tasks like event management, and start thinking about how the function of marketing can be accountable for improving the company’s commercial performance.
The role of the B2B marketing function can be precarious. It can be undervalued as firms struggle to make the link between marketing activities and bottom-line improvement. Linking marketing activity to bottom line results has always been a vexing issue for B2B marketers and for other company executives. Measuring the return on investment from marketing spend on tradeshows, adverts in trade magazines, brochures and breakfast seminars is acknowledged as being problematic. As a result, marketing is often viewed as a function somewhat isolated from sales and sales performance and, as such, lacking in credibility.
Marketing departments are finding themselves under increasing pressure to justify their spending, prove the effects of their marketing campaigns, and demonstrate program success… or risk losing their budgets.” – Forbes and MarketShare Partners
In recessionary times, marketing can face the deepest cuts. In fact many Fortune 1,000 companies don’t even have a CMO role. A 2009 Ernst & Young survey noted that just 13% to 15% of Fortune 1,000 companies employed some sort of marketing position with a chief or senior-executive-level title such as chief marketing officer or chief revenue officer. If you’re a CMO the question is how do you change this. How do you get the rest of the executive team to take marketing seriously? The answer lies in using digital techniques to turn marketing into an accountable function that makes a C-Level contribution to your company’s business growth.
CMOs and their marketing teams firstly need to recognise that more than 80% of B2B buyers find their suppliers (mostly by beginning a search on the internet) rather than a supplier finding the buyer. This is a fundamental shift in thinking. The buying process is more complex, especially for high-consideration B2B technology sales. Buyers will investigate solutions on their terms. Your job as a marketer is to reach those buyers with the right content at each step in their buying cycle. This is called content marketing: providing content in the right form for your buyers when and where they want to consume it. To do this successfully, you must first get a deeper understanding of your buyers and their buying process so you can understand what content to produce. Once you’ve done this, you need to optimise your site to make sure you can be found and use content to raise awareness amongst your buyers. You then need to use selected content to drive buyers to your website and capture their details in return for interesting content. This gives you permission to continue to nurture them until they are ready to make a purchase decision.
With digital marketing, you can track and record every interaction and response from buyers, which means you can quantify the results of your marketing spend and achieve accountability. The tools used in digital demand generation track and record every single interaction, click, open, and contact along the way showing exactly the result of any activity and the contribution to sales.
It is worth noting that there is some sticky ground here. Marketers should not get drawn into an over-reliance on reporting on email opens, page visits, Facebook likes, Twitter followers and so on. They’re useful indicators but what the rest of the organisation cares about are the number of sales ready-leads generated as a result and the cost of generating each lead. That’s the bottom line for marketing effectiveness. All those other indicators let marketing measure their own effectiveness in the process they implement to ultimately generate a lead and they can also help to measure awareness. Think of it this way: reporting how many lines of code the development team has written today is not very exciting for the sales director, but the availability of a new product is.
There’s no need to limit this thinking to the virtual world either. The framework you build for digital marketing should include capturing and nurturing leads from all sources including things like tradeshows, telephone enquiries, and sales calls. Think of digital demand generation as a best practice toolset for the marketing function as a whole not as a separate foray into the world of virtual lead generation.
When implemented together, and viewed as a whole, these techniques will show you exactly what return they produce. If your email campaign and pay-per-click results are added to your website monitoring and nurturing tools and these are all linked to a lead tracking system, you can see each customer’s journey across all your marketing channels. You can see what interaction helped to move the enquiry into a lead, the lead into a prospect, and the prospect in to a sale. As a result you can clearly measure how your spend on this new approach results in buyer awareness, sales-ready opportunities and contribution to revenue.
Your sales funnel becomes much more transparent and granular through this approach. You can identify what tactics are producing the best return, and you can gauge the return. You can also be more precise about the status of prospects in the sales funnel and the likeness and timelines for conversion to a sale.
The Promise of Marketing Accountability
Fulfilling the promise of marketing accountability will benefit your company in the following ways:
- It gives you visibility on future income by showing an accountable pipeline from the very early stages
- It helps you form a more confident view of which leads will result in sales.
- It lets you work out what spend is required at the top of the sales funnel to keep up or improve the numbers at the bottom of the funnel
- It lets you measure the cost of generating leads
- It allows you to invest with clarity in marketing, knowing what the return will be on incremental investments.
The whole picture in focus – from lead to sale
If you have the right process in place, you’ll be able to see what leads are being generated at what cost and from what sources. You can adjust your spend to generate more leads from existing sources, and quickly and cheaply test out new tactics to generate new leads. You can actively nurture each lead with a defined programme of interactions to take them to the point of being ‘sales ready’.
To facilitate better integration of sales and marketing functions there should be an agreed definition of a qualified lead. Marketing efforts can then clearly focus on producing more and more leads that are defined as ready for sales. Leads can be passed back if no longer sales-ready. Marketing can demonstrably show its contribution to the top of the sales funnel. And that means better sales results not to mention a more harmonious existence.
With the right processes in place, you can show how many leads are generated and how many of them turn into sales-ready leads. You can show how long the process takes and how much it costs. And, armed with this information, you can plan with confidence how to increase these numbers to deliver more sales-ready leads. The nebulous activity at the top of the sales funnel is now thrown into sharp relief. The true value of all your marketing activity can be revealed. And if the CMO can show the number of leads being generated by the marketing team and the cost of each lead, it makes sense that this should be reported at Board Level by the CMO just like the Sales Director’s sales funnel and the CFO’s financial statements.
Marketing should never be completely numerically driven. Company awareness, goodwill, and light-touch activities are much more difficult to measure but add significantly in terms of value. But the closer it’s aligned to it’s core activity of producing sales leads, and setting itself up to track and measure this activity, the more license it will have to perform these softer activities.
The CMO will hold more respect and gravitas when providing input to product decisions, overall strategic direction, and will gain more influence within the organisation. In making a contribution to your company’s’ bottom-line, and for the CMO’s career prospects, marketing must show a strong return on investment.
What do you think? Is it time for CMOs to be held more accountable?