Two challenges (alignment with the CEO and alignment with business priorities) remain constant for Marketing leaders. The recent Spencer Stuart CMO Tenure study suggests one of the primary reasons for the continued CMO shuffle is “poor alignment between the CEO and CMO on the mission (and the timeline) of the marketing organization’s output.” The second reason, captured in Gartner’s CMO Spend study, is that “CMOs struggle to align marketing metrics with business priorities.” Without alignment, selecting the right metrics is extraordinarily difficult. A tool exists within reach of every Marketing organization that addresses both of these challenges – the Marketing plan.
When properly developed, the Marketing plan – that is, one that consists of more than a list of programs and tactics – serves as an exceptional alignment and accountability vehicle. While we’ve been encouraging marketers to address planning differently, we’re not alone. Simon Sinek concurs that most companies “do their marketing backwards,” starting with “What?” instead of “Why?” His Golden Circle resembles the long-standing approach used in our patented Accelance® process. Here’s how to apply this approach to your Marketing plan.
Connect the HOW to the WHY to Achieve Alignment
To achieve alignment, Marketing must connect its work to WHY the business exists. Business outcomes answer the question “WHY?” They reflect the specific quantifiable initiatives and investments your organization must achieve to realize the business targets and declare success. Think of business outcomes as the “bets” your company is going to make. Once you know these, you can create programs and activities that will have direct impact on the outcomes. A well-crafted business outcome consists of three parts:
- Definitive customer-centric objectives that will affect specific business targets, such as revenue
- A clear and precise measure of success
- The time frame for accomplishment
We recommend that organizations identify the WHY with at least two outcomes: one for keeping existing customers and one for acquiring new customers. The more granular you can be about which customers, markets, and products you are targeting, the more clarity you will have about what constitutes success.
Here’s an example of the structure for a business outcome. How closely does it match the one in your Marketing plan?
N existing customers in each of our three primary segments adopt the new ABC solution by FYE, resulting in Y dollars in revenue and increasing share of wallet by Z percent.
Armed with the business outcomes, Marketing has insight and clarity into the organization’s priorities. The next critical step is to decide HOW Marketing is going to support the outcomes and positively impact the organization. There are two parts to HOW: your objectives and your strategy.
The objectives in your Marketing plan articulate the HOW. Ideally your objectives are framed in customer-centric behavioral terms, such as: Increase the referral rate of our tier 1 existing customers 30% by mid-year in order to help reduce the sales cycle by 20%.
The second part of HOW, strategy, is what enables you to accomplish the objective. Potential strategies range from customer-centric strategies, such as ambassadors and persona, to influencer strategies, to product strategies, such as bundling. When you’ve clarified HOW Marketing is going to contribute to the outcome and HOW Marketing’s success will be measured, you are one step closer to identifying the right measures and metrics.
Coming up with the strategy is one step; bringing that strategy to life is another. And that’s when the WHAT in comes into play. For most marketers, the WHAT comes naturally. These are the campaigns, programs, tactics, and activities that Marketing excels at producing and delivering. The key is to make sure the WHAT is directly linked to the WHY. When you create that linkage, it is easier for your line-of-business leaders and financial people to understand Marketing’s value, impact, and contribution.
How to Use Targets and Metrics in Your Marketing Plan to Achieve Accountability
Now that your plan answers the questions WHY, HOW, and WHAT, you are well on your way to achieving alignment. To complete your plan and address accountability, you need to make it measurable. Outcome-based performance targets and metrics chains are the two ingredients that will help you address accountability.
- Performance targets are your stakes in the ground. The outcomes, objectives, programs, and tactics all need performance targets. Performance targets provide the context when you report results. They enable you to ascertain whether you achieved success, what is working, and what isn’t working.
Setting performance targets can be difficult if you’re not used to doing it. Many organizations avoid this step, arguing that they don’t have the data. But there are benchmarks and other data points you can use to set a performance target.
This is too important a step to overlook. Targets help you drive performance improvement and initiate a discussion about priorities. They help you define an agreed-upon direction, bring focus, and facilitate adjustments. Having outcome-based vs. activity-based performance targets is a key differentiator between best-in-class marketers and the rest of the pack.
- A metrics chain is the sequence of metrics that form the links between activity, output, operational, and outcome metrics. These links and their associated data are what enable you to connect the work of Marketing to business results. Metrics chains, when properly designed, serve as the foundation for your Marketing Dashboard.
At the top of your chain are the performance target and metric associated with the business outcome (WHY) and at the bottom of your chain are the measures and/or metrics associated with the activities you will implement (WHAT).
For example, let’s say your company needs to acquire a certain number of new customers in a segment to achieve revenue and market share targets. Your company needs Marketing to generate qualified prospects from that segment who will participate in a trial. To support the objective, your marketing team develops a four-touch (e.g., direct messages, whitepaper, presentation, newsletter), multichannel (email, website, social, webinar, slide share, syndication, etc.) campaign based on the customer buying process and key personas. Each of those touches and channels has a performance target designed to produce trial inquiries.
In this example, you will form your chain with measures that connect Marketing programs, product inquiries, trials with customers, acquired customers, and market share. If you’ve crafted your Marketing plan starting with WHY and then moved to HOW and WHAT, you’ve created a clearer line of sight between tactics, investments, and outcomes. This will make teasing out the metrics chain and corresponding data easier. You might find that it will also make it much easier to secure and defend your budget.
If alignment and accountability are top of mind for your organization, use an already existing process and deliverable, the Marketing Plan. For this approach to work, you must start with WHY. By doing so, you will operate as a more strategic performance-based organization.