February 4

Peformance Measurement, Corporate Culture and the CMO

Marketing Strategy

5  comments

Yesterday, I met with the CEO, CMO and CSO at a top 500 software company.  It was clear that each executive had a completely different vision of lead generation and how to measure marketing peformance. 

This leads to a problem that affects 87% of B2B marketers.

CMOs are being pressured to prove themselves when their company’s own culture (enabled by their CEO) may be sabotaging their success. 

A new study that was covered in BtoB Magazine showed that CMOs who are effective at measuring their marketing performance are more empowered.  Seems like common sense – doesn’t it?
Survey: CMOs feel the power

I often ask CEOs how they measure marketing success.  Most CEOs know only one thing about their marketing team – how much they spend on their marketing budget.  What CEOs really yearn to know is this… what is my marketing team’s % of contribution to our revenue? 

Most CEOs agree that they aren’t getting enough activity at the top of the sales funnel.  Thus their marketers are constantly reminded that more leads are needed. . .now!  Ironically, CEOs will lament, why can’t I see ROI from marketing? 

CMOs are faced with a challenge that they can influence – their company culture.  Sam Decker wrote some great thoughts on this topic a while back. 

So after I read this study, I’m left wondering… can a CMO (who isn’t "empowered" by their CEO or culture) get the tight cooperation they need from sales to prove their revenue contribution (ROI)? 

What do you think?  Why or Why not? 

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing. He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. There’s something about me that can’t go with laying this at the feet of the CEO. CEO’s are certainly influential in setting tone and accountability in their company, but whether it’s corporate marketing, product management or product marketing, what is the purpose of a marketing organization if not to grow a company? CMO’s are by definition leaders in their company – senior executive and officer. I don’t like the concept of having to empower them – they’re already empowered – it’s just making excuses.

    Marketing and sales functions cannot exist without the other; both are required of any business. The highest purpose of both sales and marketing are one and the same – grow revenue.

    CMO’s can measure their value a number of ways – off the top of my head: qualified leads, product line growth, sales cycle, etc.

    To me, if you have a CMO that doesn’t view and measure their success in their job as building revenue, generating interest and qualified leads for sales activates, shortening sales cycles, delivering timely products that meet market needs, and maximizing stakeholder value…fire them, they don’t understand their job.

  2. Why do we need to empower CMOs to measure their marketing performance. Isn’t that their job?

    Perhaps it’s my direct response background, but I’ve never uunderstood why every marketing activity isn’t measured at some level – cost per inquiry, cost per qualified lead, cost per lead, ROI, etc.

    Direct response doesn’t have to be confined to direct mail and email. You can use it everywhere.

    You run a series of ads (or just one ad for that matter). Or you set up a booth at a trade show and send your sales on the road for three days.

    You have costs and you should have a measureable response — all directly related to these activities. Some of the responses you get become qualified leads. Some become sales. Some become repeat customers.

    What is so difficult about measuring your return on investment or your contribution to revenue?

    Sure marketing and sales people have conflicts. They always will.

    But if marketing is going to produce a lead generation program, it is going to benefit the sales people. Get them to buy into it. Get them involved. Get their input — before you put anything on paper. Then get their feedback and make adjustments after you’re underway.

    I know how important branding is to many marketing people. Branding is a laudable goal that will come over time (unless you keep changing your message, as many do).

    But if you want immediate results — if you want to measure your performance and, if needed, justify your budget — put direct response into everything you do.

    Remember, branding and direct response are not mutually exclusive. You can do both – at the same time.

    Bob McCarthy
    McCarthy & King Marketing, Inc.
    Milford, MA 01757
    508-473-8643
    web: http://www.mccarthyandking.com
    blog: http://www.thedirectresponsecoach.blogspot.com

  3. The plight of the CMO – as chronicled by all these studies and now even the AMA itself – is a retelling of “The Emperor’s New Clothes”. Jim Logan’s post is the part where the kid observes the obvious nothingness of it all.

    All the empirical and anecdotal data clearly tell us that the majority of CMOs and VPMs either do not understand their jobs (which Jim so crisply defined) OR they are do but are incapable of demonstrating a meaningful contribution to the enterprise.

    That would certainly explain the pitiable hand-wringing about lack of empowerment and declining relevancy. And the deafening drumbeat of measure! measure! measure!

    So how can reality be so nonsensical? Could it be, just maybe, for the same reason that “marketing accountability” has been an oxymoron since the beginning of time? (Apologies to analytical direct marketers who have always understood.)

    Could another fundamental factor be that most marketing programs have always sucked because only the rarest exception is actually customer-centric and fully thought-through?

    And can it be that sales and executive management really don’t understand what they need from marketing?

    That was one conclusion in an extremely insightful Aberdeen Group report from last summer called “Sales Effectivenss: Helping Sales Sell”. The honchos are demanding more leads, then decrying that they stink. The reps, on the other hand, don’t want more leads, they want more time to work whatever good leads they have.

    And finally, could the plight of the CMO also be a manifestation of the same factors that (despite rabid claims from the industry to the contrary) CRM and SFA initiatives have been abject failures? The Aberdeen report puts it more politely, suggesting that “boil the ocean” automation strategies don’t work when right-brained sales and marketing people are required to follow rigid processes.

    The trick to being an effective CMO, per Jim’s definition, is to simultaneously serve the genuine needs of the prospects and the sales force. It’s a matter of aligning the buying process with the sales process and then engineering just enough marketing process to maintain that alignment.

    Sadly, too few CMOs have the vision, leadership skills and resources to convert that concept into tactical reality. It’s not easy, but it’s doable. It starts by getting out of the lead generation business and getting into the prospect generation business.

  4. Giving the CMO the data to measure ROMI, begins with the implementation of a process that provides the following:

    -Leads that truly excite the sales representatives-either in the direct on indirect channels.
    -The leads are not just targets that fit within the the confines of the company’s product offerings.
    -The customer has pre-identified their business need(s)before they have decided upon a particular solution or issued a RFP. At this stage the rep can utilize Best Sales Practices and act as an advisor to the customer.
    -The leads allow the sales rep to focus on Closing rather that Finding business.
    -The system is very easy for the company to implement, and easy for the sales rep to use.
    -Data on the status of the leads is gathered by the same input that sales management uses to measure sales activity, funnel, and closed sales.
    -The reps do not have to provide additional reporting to marketing.

    J. Allen Hurst
    Vice President of Sales (US)
    Pinpoint Selling

  5. I think J. Allen Hurst (previous poster) is on the right track. In my experience, though, unfortunately, for many mid sized companies, the system he describes is an impossible dream. Not because individuals within the group don’t have the will or resources to get it done… if they would commit to it.

    But rather because they wait too long to see the issue and address the problem in a productive way. An organizational paralysis develops. Sales and marketing get themselves locked into ways of working, measuring and interacting that are counterproductive. The business gets stuck with ineffective lead management and sales/marketing systems.

    But the organization resists change because the habits and processes have become so ingrained — they don’t want to do the hard work (and $$) of looking at not just what they are counting, but also what they are DOING. When companies do commit to this kind of process evaluation though I believe it is possible for sales and marketing to be true partners with a shared measurement/success system and ultimately, more revenue.

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