Imagine this: You’re sitting around a conference room table with your fellow C-Suite members, the CEO, CIO, and the CFO to name a few. Then, your CEO asks you to report on year-to-date net marketing revenue as part of a P&L conversation.
Wait, what?! But, I’m our chief storyteller!
That’s right! As the digital space has evolved, so too has the role of the modern CMO. It is far more complex and broad than it was 10 years ago, perhaps too broad! You have to be intellectually ambidextrous, toggling between the creative art of marketing and the geeky science of business.
You have to be left-brain and right-brain.
Most importantly, you have to navigate tough, business conversations that effectively align marketing activities with revenue and provide value, without defaulting to more comfortable talking points like that of response rates, rankings and website traffic.
So, how do you propel the marketing function forward as a revenue driver and earn your seat at the C-suite table?
“Now, more than ever, CMOs have the opportunity to be the drivers of measurable growth for the organization. Today’s crowded, noisy marketplace means that companies have to win on ‘brand’ — CMOs are in the perfect position to connect ‘brand’ to revenue through growth-driven digital ecosystems.”
~ Frank Cowell, CEO, Digitopia Agency
On average, marketing accounts for 11% of a company's overall budget.
It’s easy to understand how critical it is for marketers to be able to align the marketing function with the bottom-line of the enterprise and articulate it as a value center not a cost center.
With that, here are three tips to help you solidify your role as part of your organization's leadership team.
Tip #1: Run Marketing Based on the Numbers
Track your marketing qualified leads (MQLs), analyze your conversion rate percentage from lead to SQL, MQL, Opportunity and close, and map your content to the sales funnel to make sure you’ve got every angle covered. Here is a glossary of sales and marketing terms from HubSpot that will help make sure you're speaking a language that translates in the boardroom.
Tip #2: Develop A Close Working Relationship With Your CFO.
According to a 2017 study from Marketing Technology Insights, only 14% of Marketing organizations see Finance as a trusted strategic partner, and 28% either have no relationship with Finance, or speak only when forced to.
But, in today’s digital economy, misalignment between Marketing and Finance will simply not cut it.
Marketplaces are more crowded than ever. Empowered and informed consumers are calling the shots like never before. And, message and product parity are running rampant.
To achieve profitable, sustainable growth, the CFO and CMO need to collaborate and contribute their different skills and perspectives. A strong finance-marketing relationship can be the differentiating factor between companies who accelerate their growth and those that stagnate and get left behind.
Tip #3: Develop A Systematic Process to Drive Accountability by Department Function and Individual.
Often times, an SLA, or service level agreement is a great place to start in aligning departments and building an accountability system.
A service-level agreement is a contract that establishes a set of deliverables that one party has agreed to provide another. When an SLA exists between Sales and Marketing, this agreement details marketing goals, like number of MQL’s in an organization's sales pipeline; and the sales activities that'll follow and support them, like qualifying and prospecting MQL’s, turning them into SAL’s, SQL’s and Opportunities. Sales and Marketing teams use this contract as a commitment to support each other and work together as a team towards a common, shared goal.
At our agency, we have a term for the alignment between our sales and marketing teams, "smarketing." Our Marketing leaders and our Sales leaders hold weekly standing meetings to check-in on the health of the pipeline and the quality of the leads. We go through each stage of the conversion process and waterfall to identify opportunities for improvement. Every percent you can improve your conversion throughout the waterfall drops directly to revenue generation.
Additionally, each department works together to identify and develop marketing initiatives that will bring more value to our clients, and volume to our pipeline so we can continue to grow, provide better services and more opportunity for our team.
If you can run your marketing department on the numbers, begin to speak the language of your finance team, align your marketing and sales teams, and agree on the metrics that matter for enterprise value, marketing will become a revenue center. Not to mention, you’ll be sitting at the head of the table, or at the very least, close to it!
If this article was helpful, download the Digital Utopia Blueprint. It comes complete with advanced templates and formulas for you to develop a financed-based budget allocation strategy that your CFO and CEO will love. The goal should always be to connect marketing strategies to business outcomes, and we're on a mission to enable our clients to articulate growth and value creation.