The Marketing budget accounts for more than 10% of revenue in many companies today. As a result, CMOs are often under tremendous pressure to demonstrate their contribution and impact to the business. One proof point is the findings in our MPM Benchmark study Cook Up Your Best Marketing Performance, where 64% of the participants indicated that “the pressure for Marketing to measure its value, impact and contribution is on the rise.”
Clearly Marketing continues to struggle with performance measurement the prerequisite for accountability. This combination of increased pressure and negative C-Suite perception is bringing about the day of reckoning for Marketing. The recent Proof Analytics study reported that 96% of the C-Suite among Fortune 1000 companies believe that “their Marketing & PR Teams as “unwilling or unable” to prove ROI. As a result, many CMOs lack the suport of the C-Suite as revealed in the HBR article The Trouble with CMOS which declared that, “80% of CEOs don’t trust or are unimpressed with their CMOs. It’s no wonder that companies are increasingly turning to Finance and/or Procurement to lead the Marketing accountability and measurement effort.
The struggle with accountability often serves as a symptom of poor alignment. Kimberly Whitler and Neil Morgan posited that “alignment of responsibilities is the critical area where mistakes are made.” Our research and that of others find that CMOs and Marketing organizations that achieve alignment are better able to crack the code on accountability. As a result they are in a better position to avoid receiving budget cuts or their marching papers.
How Three Alignment Steps Improve Your Accountability Success
Darren Bridges, president at Safe Systems, reflected what we hear from many of our customers in the C-Suite, when he said, “Success requires that marketing is aligned to the business and that we can accurately measure Marketing’s impact.” To see a real-life example of an organization refining its alignment to improve accountability, read our case study on his company: Aligning Marketing to Business Results.
The case study explores how Safe Systems went from being activity driven – primarily due to lack of alignment – to having clearly defined business targets and a set of quantifiable business outcomes on which to build a more strategic, measurable customer-centric Marketing plan. You’ll learn how they morphed from having a dashboard that didn’t fully communicate Marketing’s contribution or support decision-making to having a set of metrics for the dashboard that more clearly communicates Marketing’s impact to the C-Suite.
These three alignment steps were crucial to the accountability transformation.
- Alignment to the Business. At the end of the day, Marketing’s fundamental mission is to be a champion and drive growth by finding, keeping, and growing the right set of profitable customers. Growth is the driving force for any business and a critical aspect of every strategic planning discussion, yet only 22% of the job descriptions Morgan and Whitler studied mentioned how CMOs would be measured or held accountable. Marketing leaders need to form clear strategies for measuring Marketing’s impact and contribution to growth. This requires thinking beyond buckets of revenue and drilling into data on customers and segments. Marketing also needs to facilitate consensus with, and buy-in from, the C-Suite on the measurement strategies.
- Alignment to the Customer. As a business owner, there are some things I need to buy, such as liability insurance, and some things on which I need to be sold, such as sponsoring an event. It is Marketing’s job to understand the:
- buyers (and buyers’ needs)
- buyers’ journey to purchase (and renewal)
- products (are they bought or sold)
- buyers’ buying criteria (and how to match solutions to these)
- buyers’ supplier preferences (and how to become the preferred supplier)
This is the nuts-and-bolts, non-sexy work of Marketing that often requires data and research. It is from this work that Marketing defines the key stops along the customer lifecycle – from contact to connection to conversation to consideration. Armed with this information, Marketing determines the appropriate positioning, effective messaging strategy, programs, tactics and associated channels, and activities and can establish the performance targets and relevant metrics.
- Alignment to Strategy. When Marketing is aligned it can serve as a strategic asset to the organization and enable the organization to make strategic decisions. In our MPM Benchmark Studies, no Marketing organization earned higher than a 7 out of 10 on their ability to provide data that is relevant to business decisions. A business should make data, analytics, process, and MarTech investments within the context of what the business needs to grow.
Read more: Three Steps to Enabling Accountability in a Digital Ecosystem