Clicks, likes and shares – sorry, CMO, but no-one cares.
When it comes to business-changing conversations, ignorance is definitely not bliss. As so many CMOs run against a brick wall of misunderstanding and scepticism about their craft, the key is to adapt language and measurements of success to terms and priorities at the heart of boardroom conversation.
Despite the undeniable importance of marketing, many businesses still view it as a burdensome expense rather than a valuable investment. This mindset has led to a significant disconnect between marketing departments and boardrooms, evident in the alarming statistic that the average tenure of a CMO is only half that of a CEO in Fortune 500 companies.
Ditch the clicks and cut to the chase
Numerous factors contribute to this problematic situation, including the constant global economic upheavals of the past 15 years, culminating in the recent post-pandemic crisis.
As boardrooms continue to exert mounting pressure on marketers to achieve more with limited resources, effective communication between both sides becomes paramount. However, let’s face it – we probably don’t do ourselves many favours, as we speak in our ‘lingo’ and become engulfed in strategy and creativity. CMOs have the onerous but vital task of relating channel specific metrics, branding, creatives and content to tangible business driving markers and targets that feed into a wider growth and sustenance conversation at board level.
To navigate the treacherous boardroom terrain, tailored and precise measurement is crucial. Simply put, marketers must speak the language that executives understand.
Across the board
Across ALL the seats in the boardroom, siloed approaches will create a fragmented approach to business growth. It’s essential to acknowledge the importance of effective communication and the value of marketing as a revenue-driving investment, but to do this, CMOs must adjust their language and approach to speak the language of the boardroom. Marketing needs its voice and presence, and it needs to be empowered by the boardroom, sitting toe-to-toe with, and backed by, its compatriots, to do its work and make a tangible difference to revenue.
Help is at hand, thanks Ian!
In an attempt to address these shortcomings, the Data & Marketing Association (DMA) recently released the ‘CMO Effectiveness Toolkit,’ designed to better equip marketers for their battles in the boardroom.
The toolkit focuses on two critical areas: first, it assists marketers in identifying the most suitable metrics for their businesses, and second, it equips them with the necessary tools and language to “prove” the effectiveness of marketing to executives.
According to Ian Gibbs, Head of Insight at the DMA, the toolkit concentrates on four key types of effect:
- Business effects – that matter to the boardroom, such as market share, profit growth, and shareholder value;
- Brand effects – including awareness, consideration, and brand perceptions;
- Direct response effects – such as short-term sales, conversions, and footfall;
- Campaign effects, which, to be honest, hold little actual significance, such as eyeballs, views, clicks, likes, and shares.
Bring it down to earth, and quickly
The problem lies in the fact that marketers often rely on metrics that are highly relevant to their own world but superfluous to executives. Boardrooms deal in hard numbers and demand tangible evidence of how a campaign has influenced concrete metrics like profit growth and shareholder value. Shockingly, the DMA reveals that just 8% of the metrics in its database address these crucial “business effects” that CEOs value.
Gibbs straightforwardly advises marketers to stop fixating on metrics that don’t matter, such as clicks, likes, and shares. Average CEOs will simply shrug their shoulders if you bombard them with meaningless data about the number of eyeballs on an ad. Instead, focus on demonstrating the impact on the business itself.
From 178 to 10, the NPS and retention rate could be key
To achieve this, CMOs must narrow down the 178 metrics available to a concise set of around 10 that align ideally with their specific business and industry. These selected metrics should form the foundation of a streamlined “measurement plan.”
Importantly, Gibbs highlights a high net promoter score and a high retention rate as metrics that are particularly linked to business effects. He emphasises the need to benchmark against the relevant industry sector since performance varies across different sectors.
Bridging the gap between the board and the ground
In the face of global economic challenges and tighter budgets, the gap between marketers and executives continues to widen. This has resulted in an alarming focus on short-term success at the expense of long-term planning throughout the industry. The challenge for CMOs is to bridge that gap, keeping buy-in from both their fellow board members and their team to create mid and long-term strategies that meet the needs of marketing approach and business vision – especially now.
In times of economic downturn, there is a limit to how much response can be generated from cash-strapped consumers. Prioritising genuine relationships with consumers over appealing to the lowest common denominator is crucial. Brands that neglect relationship-building are treading dangerous ground.
For CMOs and CEOs to navigate these trying times successfully, effective communication is paramount. Marketers must adopt a business-centric language that CEOs can understand. Furthermore, executives must recognise that marketing is an investment, not a mere cost. Time and again, brands that prioritise robust marketing emerge from crises with stronger foundations than their competitors.
It’s about strategy
The board won’t ‘like and subscribe’ to your approach without a defined strategy and rationale backed by a map of metrics feeding into tangible business goals.
A defined strategy for the board to invest in is central to their impact in the boardroom, and here’s why:
- Alignment with business goals: A marketing strategy ensures that the marketing initiatives and investments align with the overall business objectives. It demonstrates how marketing activities will contribute to the growth, profitability, and long-term success of the business.
- Resource allocation: A marketing strategy helps CMOs articulate their resource needs, such as budget, personnel, and technology requirements, to achieve marketing goals. This clarity assists the board in evaluating the resources required to execute the strategy effectively.
- Risk mitigation: A well-thought-out marketing strategy considers potential risks and challenges in the market, competitive landscape, and customer behaviour. By addressing these risks in advance, the CMO can demonstrate to the board that they have identified potential obstacles and have plans to overcome them.
- Measurement and accountability: A marketing strategy outlines specific objectives and key performance indicators (KPIs) that can be measured and evaluated. This allows the board to assess the effectiveness of the marketing approach and hold the CMO accountable for achieving the desired outcomes.
Demonstrating the impact of strategy
- Clear goals and objectives: The marketing strategy should clearly define measurable goals aligned with the organisation’s overall objectives. These goals should be specific, realistic, and time-bound. Demonstrating how achieving these goals will impact the organisation’s growth and profitability is essential.
- Target audience analysis: CMOs should demonstrate a deep understanding of the target audience and market segments. This includes showcasing market research, customer insights, and competitive analysis that inform the marketing strategy. Highlighting the size of the target market and potential growth opportunities can help establish the value of the strategy.
- Competitive advantage: CMOs should emphasise how the marketing strategy will differentiate the organisation from its competitors. This can involve showcasing unique selling propositions, brand positioning, and innovative marketing tactics that give the organisation a competitive edge.
- Return on Investment (ROI): CMOs should demonstrate the potential return on investment of their marketing strategy. This can be achieved by presenting financial projections, cost-benefit analyses, and historical data that highlights the impact of marketing initiatives on revenue, customer acquisition, retention, and brand equity.
- Metrics and analytics: CMOs should establish a framework for measuring and tracking the performance of marketing initiatives. Demonstrating the ability to collect and analyse data, and how these insights inform decision-making and optimisation, can enhance the credibility and value of the marketing strategy.
- Implementation plan: CMOs should present a clear roadmap for executing the marketing strategy, including a timeline, key milestones, and resource requirements. This demonstrates the feasibility and practicality of the strategy; instilling confidence in the board that the plan can be effectively implemented.
Get support
CMOs should work with their teams and agencies to continually relate the day-to-day tasks to metrics that matter at c-suite level. That way, from the ground up, marketing can continue to grow in prevalence during good and bad times. By educating your marketing team about why it’s important to relate channel-specific metrics to revenue and commercial position, a better congruence is created between marketing activities and the c-suite. Your marketing team, particularly senior members, should be able to answer questions such as:
‘Do you know how many of your email blasts translated into direct revenue?’
‘Which product launches resulted in the most revenue?
‘Which activities contributed to an increase in the value of client retainers?
‘Which activities increased upsell?
If they aren’t thinking this way, then their approach won’t be tailored to meet the demands of the board, making the CMOs task even more challenging.
By relating your reporting metrics to business goals, you’ll have the added bonus of keeping your specialists and agency teams focused on the figures and outcomes that will help keep your fellow executives engaged.
And finally…
If you’re looking for support in gaining buy-in and investment from the boardroom, then look no further. At StrategiQ, our team of specialists and strategists work from the top down; focusing on defining business goals and the metrics and channels that will move the needle in the right direction. Speak to a member of our team today to find out how we can help.
