Can You Prove the Value of Marketing to the C-suite?
[For the December cover story, Target Marketing asked a field of marketing experts the top four questions facing marketers in 2015. This is the first question in the series.]
One of the biggest advantages of direct marketing has always been that it's highly accountable. You spend the money to create a campaign (whether via direct mail, email, telephone, pay-per-click ads, or what have you), and you can see clearly how that converts and how those conversions lead to sales, revenue and an impact on your bottom line.
Now executives are expecting that level of accountability from the entire marketing department, often with an eye toward short-term returns, and that's been a challenge for many marketers.
"The most important question for marketers in 2015 is the same question from 2014: What is marketing going to do about revenue," asks Debbie Qaqish, principal and chief strategy officer of Atlanta-based demand generation and revenue marketing consultancy The Pedowitz Group.
"The pressure for marketing to demonstrate ROI and their direct impact on top-line revenue growth is enormous and continues to build," says Qaqish, also the author of the book "Rise of the Revenue Marketer." "Yet, many, if not most, marketers are still struggling with how to answer this question" to the satisfaction of company executives.
"We also still see marketing struggle with internal legitimacy as a business unit in the organization," she continues. "Marketing is still heavily viewed as the 'pens and mugs' or 'arts and crafts' department [to top executives]. Many marketing executives find it very difficult to change the perception of marketing as it relates to revenue. As one VP recently told me, 'I have a seat at the table, but I don't have a voice.'"
Changing that perception of marketing comes back to revenue responsibility.
"The most important question will be, 'Are our investments in marketing generating revenue?'" says Dan McDade, founder of Johns Creek, Ga.-based B-to-B prospect development company PointClear. PointClear recently published a whitepaper called "RING: Mind the Gap" that identifies the difference between desired revenue and expected revenue from new and ongoing inbound activities as "The Gap."
"How is 'The Gap' filled," asks McDade. "Despite all of the hype around inbound (what I call 'inbounditis'), there is going to be a requirement for a certain amount of proactive outbound marketing."
Marketers have a bigger picture on their minds, says Lois Brayfield, president and chief creative officer at direct marketing agency J. Schmid & Assoc., based in Kansas City.
"The most important question is not a new one, but one that continues to plague marketers: 'Where should I spend my marketing dollars,'" asks Brayfield. "But the question they should be asking is, 'What key metric is really driving growth for my brand?' Rather than chasing best practices, marketers should clearly understand what is driving the sales funnel. If your brand is driven by a sales force, then what metrics demonstrate efficient and effective leads? Rather than looking at a multitude of analysis that sometimes takes one down a rabbit hole, focus on the No. 1 metric that will drive the most growth."
Amanda G. Watlington, founder of SEM consultancy Searching for Profit and CEO of management consulting firm City Square Consulting (both based in Charleston, Mass.) suggests a way to do that.
"In the past, many companies poorly understood the need to develop robust marketing attribution models," says Watlington. "Now, they are scrambling to develop an understanding of a complex set of variables, yet are working with only minimal experience. … Nuanced attribution models are essential for optimizing budget spend and the ultimate success of the marketing program. It is hard but essential work."