The numbers game: why marketers must play along
Greg Taylor outlines the need for marketers to keep data and results of their efforts to be able to show the rest of the executive team that strategies are working.
If you are a CMO, do you see yourself as different to the rest of the executive team? Do you find yourself talking campaigns and brand, while all they talk about is numbers? It can be a source of frustration. Don’t they recognise the important work you do for the business? After all, without marketing, there would be no sales and, therefore, no numbers to talk about.
If you don’t have numbers to support you, there’s a real danger that the rest of the exec team will start offering opinions on your marketing activity. And you don’t want that to happen. Who wants an ad campaign designed by a CFO? Instead, you need to demonstrate what you are doing is working. Tangible results. ROI. For that, you need to start talking numbers with the rest of the team.
Do you know the ratio of customer lifetime value to the cost of customer acquisition, for example? Can you articulate what the revenue or margin contribution is for each marketing dollar spent? Can you make a convincing argument about marketing’s contribution to the bottom line?
Some marketers argue that you can’t measure the returns on everything you do. You might suggest there’s no ROI from putting your pants on in the morning, but you still do it. But technology is helping us track more and giving us a clearer understanding of how each marketing element contributes to ultimate outcomes. Multi-touch attribution means we have a clearer understanding of all the points we interact with people.
Stop talking about campaigns
In the past we ran campaigns. That was pretty much what the marketing team did. The exec team wanted to know how much each one cost and whether it worked or not. They’d probably look for a spike in sales or an increase in the pipeline.
This sort of top-line thinking conditions your peers into believing that marketing is instantaneous – you spend the money; you see the results. But who’s to say your campaign hasn’t created pent-up demand that might take months to be realised? Or that you actually preventing an imminent slide in sales?
Besides, a campaign is only the beginning of the process. It might initiate leads, but what about the ongoing engagement that can be far more influential on your brand and sales success?
To show the real effect of all this activity you need a comprehensive transaction record for
every customer or prospect you touch. You need to join the dots, from those who attend seminars, visit the website, call in-store or click on an ad. You need to link offline activity with online activity, and know which factors pushed each person along the line to a sale.
Historically these measures were not attributable to any individual. You’d know how many people clicked an ad, but you wouldn’t know if the same person had visited you at a trade show a week before. Often the results would sit on disparate systems and databases – such
as separate e-commerce, advertising, PoS and CRM systems. Having all this information gathered on one platform means behaviour can be tracked across multiple channels. Now you can start to get a clearer picture of what influences an ultimate purchase decision.
Taking it to the top
The real challenge marketers face is having too much information. So you need to quickly identify the outcomes the executive team is interested in (for example: revenue, pipeline, retention rates, repeat purchases, gross margin contribution, lifetime value), then work through the available data to build models that will answer those questions.
It’s impossible to achieve this without the right system in place – one system that ties all your customer interactions together. Once you are there, however, awash with information, you will find the conversation at the top table is very different. It’ll be all about the outcomes and projections. The CEO might not like the look of an ad, but they won’t really care if you can show it’s working.
Facts (or data!) have always been the best way to make your case and win an argument. Marketers can now build up that ammunition. You need to get it too, before your finance chief gets his coloured crayons out and starts drawing your next advertising campaign.
Greg Taylor is managing director at Marketo.