• The CMO Agenda in a Tight Economy

    What should be the CMO agenda in an environment where marketing budgets are tighter than ever?  According to a recent white paper entitled “CMO Guide to Marketing ROI,” published by the Lenskold Group as part of their Marketing Profitability Management Series, the CMO agenda should focus on creating strategies and tactical plans with strong capabilities for measuring and managing marketing ROI.  These are essential for delivering healthy profit streams that will keep a business growing.

    A recent survey released by the Argyle Executive Forum and Aprimo highlights major challenges currently faced by CMOs.  A significant percentage (37%) said that integrating and tracking multiple channels was their biggest challenge, which speaks to the issue of measuring across organization silos.  39% of those interviewed also complained of the difficulty of being able to correlate marketing activities to revenues.  Other CMOs (28%) named having to do more with increasingly shrinking marketing budgets as one of their biggest challenges.  Finally, 27% of CMOs stated that tight accountability requirements related to marketing ROI was the primary motivator for change in marketing strategies.

    Clearly, there is significant anxiety surrounding measurement capabilities and the ability to define the value of marketing.  The Lenskold Group report lays out a CMO agenda that focuses on closing gaps between marketing spending and marketing results to become more accountable.  To this end, the CMO should prepare to answer the following questions:

    • What do you know with certainty about your marketing effectiveness, and what remains unknown?
    • What parts of your marketing are not delivering enough results?
    • Is your team properly accounting for lifetime value?
    • Can you pinpoint where prospects leak from the purchase funnel?
    • Is there a way to assess opportunities from new media channels and manage the additional complexity?

    Fortunately, today’s CMOs have robust tools available for integrating data, systems, and processes and to help manage marketing performance and profitability.  But even with an increasingly accessible supply of data and advanced technologies capable of sophisticated measurement, CMOs need a solid framework that combines strategic and analytic tools to drive results.  The Lenskold Group report proposes the following framework for CMOs:

                    1. Manage and assess ROI drivers,

                    2. Plan and execute high-impact measurements, and

                    3. Use insights to develop and deliver smarter marketing.

    The CMO plays a critical part in the first stage, which involves ensuring the company has access to required data, standardized ROI tools, and the discipline and practice to put these tools to use.  The CMO should strive to involve the finance organization in the development of marketing ROI calculations.  Not only will this help increase tool quality but help establish credibility with finance.

    In the second stage, the CMO is critical in determining what, when and how to measure, and ensuring that resources are available, measurement discipline is high and the best measurements are used to drive business outcomes.  Advanced planning and long-term (six to 12 months) measurement plans aid in prioritizing high impact measurements, help leverage diverse methodologies and allow the integration of multiple measurements for greater insight.

    The CMO must establish strong expectations for the marketing team in the third stage, and must be able to communicate the need for the team to take actions and constantly seek performance improvements using marketing ROI capabilities.  Further, the CMO must encourage and reward decisions that demonstrate strong insights-based action.  Finally, the CMO is instrumental in resolving performance barriers issues resulting from cross-functional gaps between marketing, sales, customer service, finance, or product management.

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