In our last post on marketing accountability, we looked at how digital techniques empower marketers to produce measurable results. What does this mean for the role of the Chief Marketing Officer or Head of Marketing?
The role of the CMO can be precarious. It can be undervalued as firms struggle to make the link between marketing activities and bottom-line improvement. In recessionary times, marketing can face the deepest cuts. In fact many Fortune 1,000 companies don’t even have a CMO role. A survey back in 2009 by Ernst & Young 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 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 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 to 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.
The tools used in digital demand generation track and record every single interaction, click, open, and contact. This means you can see 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.
To facilitate better integration of sales and marketing functions there should be an agreed definition of a qualified lead. Marketing efforts can then be clearly focused 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.
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’.
You can now show how many leads are generated and how many of them result in ‘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 can add significantly in terms of value. But the closer marketing is aligned to the core activity of producing sales leads, and to 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.
It’s time for CMOs to stop marketing being judged purely on things like superficial design and event management, and start thinking about how the function of marketing can be accountable for improving the company’s commercial performance.