What Does Marketing Effectiveness Mean to a CEO…?

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…not much right now.  Look at these stats from the Fournaise Group about how CEOs value marketing.

• 77% of CEOs are frustrated that their marketers keep talking about brand, brand values, brand equity and other similar parameters that  management has difficulty linking back to results that really matter: revenue, sales, EBIT or even market valuation.

• 73% of CEOs say that when they ask their marketing teams to increase marketing ROI, they tend to understand it as cost cutting through better economies of scale or negotiations with  third-party partners and agencies, instead of top-line growth generation (more revenue, more sales, more prospects, more buyers) – translation, most marketers don’t truly understand ROI and can’t track it.

• 72% of CEOs state that marketing is always asking for more money, but can rarely explain how much incremental business this money will generate.

• 70% of CEOs stated that marketers bombard their stakeholders with marketing data that hardly relate to or mean anything for the company’s P&L.

Wow, if this is really the case, then CEOs aren’t even thinking that marketing can become more effective. But we know that’s not true. We do know that CEOs care about getting an ROI for lead generation budget dollars spent. We do know that CEOs look at metrics such as revenue, costs, revenue per employee, net profit margin, earnings, and much more.  All of these metrics can be affected by marketing effectiveness (of course along with many other factors).

In order for CEOs to care about marketing effectiveness, marketers have to care about impacting the metrics that CEOs care about (such as the ones listed above).   Marketers need to start changing their approach to lead management to impact marketing effectiveness. There are three primary ways that marketers can do this.

  • Start tracking ROI per lead generation campaign.
    • New tools and processes enable marketers to gain visibility to ROI metrics.
  • Evolve marketing’s metrics of success.
    • It’s no longer enough to provide metrics such as opens and clicks on leads, marketers must take that next step to see if those leads that click actual move into an opportunity and then into revenue.
  • Take responsibility for the quality of leads versus just the volume of leads provided to sales.
    • To drive the metrics and ROI that is tracked, marketers must start driving quality leads to sales. This objective can be met by implementing the appropriate technology and processes.

Marketing effectiveness doesn’t mean very much to CEOs – but it should, and it can. Marketers just need to understand how they can impact the metrics that CEOs care about and actually take the steps (no matter how small) to get there.

3 Responses to “What Does Marketing Effectiveness Mean to a CEO…?”

  1. Ripe Inc. August 16, 2011 at 4:17 pm #

    The tracking suggested here would need to be done internally over a long period of time. I don’t know how that would relate to consistent brand building at all if the company’s performance as a whole is not taken into account.

    Any CEO can look at Coca Cola’s bottom line brand value and see the value in building a brand and increasing brand equity (or loyal customers) – if numbers are the issue. As long as a brand consistently delivers on its promise to the consumer without any unexpected hiccups, then the consumer is likely to pass around the good word to others – which inevitably leads to growth.

    The measurement of any company’s own marketing will be affected by many factors which go beyond what the marketing department has control of. The bottom line here is that in order to ensure your marketing dollars are well spent, the company, which means every single employee, must consistently excel in all areas to confirm and back up all strong messages and attention-grabbing graphics pushed out by the marketing department.

    If CEOs are frustrated, it may be because the company is not capable of living up to its own hype. Branding is only effective if it authentically and accurately defines all that is better about any given company. I would suggest that over-promising and under-delivering is a much more common source of frustration for CEOs and customers alike.

  2. Jesus August 18, 2011 at 8:31 am #

    Short answer: Too many nincompoops marketers – more interested in self aggrandizing than in actually achieving ROI for their efforts

  3. Amy Willis August 18, 2011 at 1:25 pm #

    Great article. I think this perspective is often overlooked, especially when it comes to a ROI with social media efforts. It’s important to stay focused on the overall goals for the client.