Marketing 2016: more than metrics and tactics
4 tips for going beyond metrics to show marketing’s value and drive profit and revenue—really.
Tom Foege | November 30, 2015
According to a recent survey by Fournaise Marketing Group, a whopping 80% of global CEOs do not believe that their marketing chiefs add value to the business.
CMOs, that’s a stunning statistic, and one that shows it’s time to rethink your approach to showing marketing’s value.
This pressure to prove the value of marketing efforts is nothing new. And though marketers have begun tracking various metrics to show their worth, it’s not solving the disconnect with senior management, as the Fournaise survey so aptly illustrates.
80% of global CEOs do not believe that their marketing chiefs add value to the business.
Source: Fournaise Marketing Group
Connect activity and value to drive profit, revenue
CEOs want marketing to focus more on profit and revenue.
Though tracking metrics for social media, web, and email are important, CEOs view these metrics as tactical and lacking long-term value. The Fournaise survey surfaced that CEOs believe that CMOs focus too much attention on creative, social media and the latest marketing technologies.
So, how can marketing show the connection between activity and value—or, more specifically, profit/revenue? Be on the front end of product development and sales processes.
Because marketing is responsible for gathering information on markets, customers, and competitors, it makes sense for marketing to lead the process of converting that information into actions.
Marketing should not simply analyze research and share results with different teams within their company. Marketing must organize the process of mobilizing a cross-functional group to jointly decide which business strategies to pursue—such as market penetration, market development, and product development or diversification.
This cross-functional group can determine prioritized features to add to existing products, or decide to venture into new markets. These important business decisions are determined based on data and insights gleaned from marketing activities.
“Marketing leadership needs to foster a culture of innovation that creates new products, new services, and new customers.”
Beth Comstock, CMO, General Electric
Profit-driven marketing case study: GE
At General Electric (GE), CMO Beth Comstock developed a number of processes to show marketing’s leadership in driving profit and revenue.
Comstock created GE’s Commercial Council: a group composed of top marketing and sales leaders from across the company that meet regularly to review market research and plan growth programs. The initiative involves bringing a GE-wide view to three to five key verticals, services, and solutions to identify bigger opportunities. GE’s marketing team listens and observes market behavior, needs, and wants—allowing the company to focus on a “what to make for the markets” approach, rather than reverting to “make and sell” tactics.
Comstock also insisted on a well-documented process for collaborating with customers. Using data generated by marketing activities, this process allows GE to know its customers better than they know themselves. GE can not only learn from this information, but also feed data back to customers to make the customers smarter—and lock them in with GE long term.
The results for Comstock are new products, services, and markets for GE—and higher profit and revenue. Do you think Beth Comstock needs to show her value by showing promotional metrics? Marketing is the hub of the GE company wheel.
Put GE’s marketing wins to work in your org
How can you model your marketing efforts on Comstock’s GE success story?
1. Be integral to all processes related to profit and revenue.
If CEOs want chief marketers to focus on profit/revenue, be part of the solution by insisting on being a leader in all discussions about profit and revenue. Be prepared to bring specific information to the table on customers and competitors to generate more trust and respect for your opinions.
2. Gather market, customer, and competitor data.
You do this already, just organize the information to have meaningful decision-making conversations with product development, sales, and senior management.
- Detail the trends that make certain markets attractive
- Explain the benefits of attacking specific market segments
- Describe how and why some customers are more valuable than others. What are the characteristics of your most profitable customers?
- Looking at competitors, what industries show the greatest promise of differentiation and customer-desired positioning?
- Are you able to maintain a sustainable advantage over your competition?
- Can you offer what customers want, when they want it, better than your competition? Explain that to your internal audiences
3. Set up collaborative work efforts with product development and sales teams.
Don’t work in a vacuum. Lead the effort to create more effectiveness and efficiencies with product development and sales teams:
- Gather information focused on needed product features to take them to the top of the priority list.
- Provide your sales team with detailed differentiation and positioning information.
- Focus your research efforts to lead to generating better qualified leads for the sales team.
4. Make decisions together.
- Facilitate all discussions regarding strategic direction. Gather a cross-functional group, along with product development and sales, to make decisions based on current market information.
- Offer all possible recommendations for strategic action based on market research. For example, should your company enter a new market or create a new product for an existing market?
- Collaborate with leaders in product development, sales, and senior management to track major activities, by team, to improve your products and customer interest.
Going beyond tactical marketing activities won’t just please your CEO—it will improve the bottom line. And when you give marketing updates to senior management, you can confidently share that the newest version of your product (that increased profit and revenue over the previous version) was a result of marketing working in concert with product development and sales to provide the right product to the right market.