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Marketing Metrics and ROI
The Definitive Guide to Marketing Metrics and Marketing Analytics is one of my best pieces of thought leadership. Seventy pages long, it covers everything I've learned about:
How to build marketing respect and accountability
Which metrics to use (and which to avoid)
The best ways to measure marketing program ROI
How to forecast marketing's impact on revenue
How to design the best dashboards for your business
And much more!
As an executive, the journey of learning and growth never ends. In this post, I share some of the key lessons I've learned from various sources, including CMG Partners CMO's Agenda™ and Paul Albright, Marketo's former Chief Revenue Officer.
First and foremost, executives must be business leaders, not just departmental managers. This means earning a seat at the revenue table, balancing vision with action, and combining creativity with hard data and measurement.
Customer intimacy is another crucial aspect. Every successful strategy starts with a deep understanding of the target market, and high-growth companies are more likely to tie marketing executives' compensation to customer satisfaction.
Innovation is about transformation and reinvention, but it can be challenging, especially when it means moving away from what made you successful in the past. Effective executives continually ask how they can transform their marketing and business, even if it means embracing strategies that are alien to them.
Managing a high-performance team is also critical. This involves cultivating an execution-driven culture based on facts and results, setting goals and measuring progress, being data-centric and customer-focused, taking the initiative, and being direct and real with your team.
I conclude by asking readers where they go to learn and what their favorite lessons are, inviting them to share their own insights and experiences.
The five stages of Marketing Accountability are:
Read more in the original post on the Marketo blog: The Five Stages of Marketing Accountability.
The CMO Council report, Define & Align the CMO, says that the most successful CMOs bring a strategic long-term view, exceptional measurement and analytical capabilities, and financial management rigor to their role.
Other marketing executives may excel at marketing, with great experience building brands and executing programs. But without the skills to provide strategic and financial leadership to the organization, these executives do not deserve a C-level title. VP/SVP of Marketing describes their role just fine.
The modern CMO must play a role broader than just leading the marketing organization. The role must include driving revenue, leading innovation, and providing strategic vision. These growth champions must lead all four Ps – not just promotion but also product strategy, place (channel and distribution), and pricing. And all this requires a greater focus on quantitative measurement and ROI.
Read more on this topic in my Marketo blog post, Are You a CMO or a VP of Marketing?
One key thought that has driven much of my marketing thinking is this: marketing should be as accountable for revenue as sales. This is especially true with modern buyers who use information abundance to seize control of the buying process and delay engagement with sales until much later in the buying process.
In late 2006, I wrote a series of articles about this process, which were then compiled into a single article for Revenue Performance How Marketers can Earn a Seat at the Revenue Table. In the article, I ask "What can marketers do in order to be seen as part of a machine that drives revenue and profits, not just the people who throw parties and buy swag?" The answer, I argue, is to recognize that at most companies, Sales is the function that owns the revenue pipeline. (Sales and revenue often go together, so much that some people use the words as synonyms.) This means that marketing can earn their seat at the revenue table by acting MORE like sales with these key actions:
Check out the entire article, How Marketers can Earn a Seat at the Revenue Table, for detailed explanations of each of these ideas.
One topic that seems to always fascinate marketing executives, and myself, is "how much should my company spend on marketing?" This of course comes with the implied question, "how can I justify my marketing budget to fellow executives?"
I wrote about this exact topic on the Marketo blog on October 12, 2006, in a post named Benchmarking Marketing Budgets. Check it out for some useful stats. Then on January 21, 2007 I wrote a follow-up, How To Sell Your B2B Marketing Budget To Your CFO. Here, I make an important argument: the best way to justify your marketing budget is to think of it as an investment that incurs costs today but delivers benefits for many years. When we think of the marketing budget as an investment, and not a cost, we not only help convince others that marketing is not a cost center, but we also let the marketing budget to be amortized over the entire “useful life” of the investment. This in turns allows the company to make more strategic but still rational big bets on marketing.
Read the Marketo ebook Selling your Marketing Budget to your CFO for more on this topic.
