For years there has been concern over the relationship between the CEO and Marketing. You’ve likely read this stat before, but we are going to cite it again because for anyone who hasn’t it’s telling. A 2012 study by Fournaise showed that 80% of CEOs do not trust and are not impressed by their marketing teams. And in 2016-2017, Gartner found that marketing budgets began to fall. They have since recovered, but these statistics illustrate the trepidation felt by CEOs in investing a portion of revenue in unproven marketing strategies.
Imagine you’re a CMO sitting in the executive meeting explaining how a marketing strategy is performing. You likely deliver a number of impressions—25 million!—and then the number of shares—17—and comments—5—your latest campaign has posted. But does any of this translate to the revenue? How does it sell to the target customers? From these metrics, how does the CEO realize the value?
Simply put, what actually matters to your CEO?
Speaking the right language
A report from NewBase showed that only 53% of CMOs believe their CEOs fully understand the value of marketing and the CMO role. CEOs and other executives, including the board, may struggle to understand the technical language of marketing if they have no background in it, so it is important for CMOs to speak the right language.
Talking about KPIs, impressions, impression share, and using other marketing-specific lingo will detract from the message you want to send to the CEO—namely, that advertising is bringing in revenue. What the marketing team measures does not always stack up against what the financial team measures, so it is important to find that link.
CEOs want to understand the ROI from their marketing budget, and while that is difficult to assess, this very metric is why they trust CIOs and CFOs more than CMOs—the return is based on parameters that prove revenue generation. To deliver that information, start looking at sell-in, sell-out, marketing ROIs, market share, marketing effectiveness rate, and prospect volume and quality rate.
Matching metrics with insight
Part of speaking the right language is matching the metrics you’re delivering with insights. Information overload during your report can diminish the impact. Aligning your successes with the CFO’s report, or what financial information you can use, will show the CEO why investing in marketing is worth it.
Break down the analytic silos between sales, marketing, ops, and customer service, and combine that data to show the customer journey—where along the pipeline a customer is acquired. Because customer acquisition directly correlates to revenue generation, encouraging transparency in data is key to providing CEOs with insight into how marketing is achieving its goal.
Connect it to the customer
When Airbnb decided to put the customer experience first, they focused on three KPIs: quality of the listing, ease of booking, and guest preferences. They also built their website to appeal to emotions with their customer-centered “Belong Anywhere” approach.
On social, they continue to push connection with their customers—retweeting Airbnb posts by customers, sharing new listings and why they matter and offering content that entices the consumer to curiosity. This approach generated billions of dollars for Airbnb and pulled a significant share of the industry away from hotels despite their pricing typically being higher than their competitors.
Airbnb’s story proves one thing: They know their customer. From the top-down, it is clear who they are selling to.
Your CEO likely has some idea of who they want to sell to, but is it written down? Have you created customer profiles and determined what share of those customers you currently have and where you can gain?
By connecting your metrics to the customer and delivering your report based on that connection, the CEO will better understand how marketing relates to the bottom line, customer acquisition, and ROI.
Building the CEO/CMO relationship
“CMOs face several functional challenges as they seek to drive growth. The fundamental problem is the lack of externally validated standards for the marketing function,” according to Chris Hummel, the CMO of United Rentals and a member of the Forbes Marketing Executive Council. “Every other function has its own language…that allows it to intelligently discuss, measure, communicate and collaborate to achieve common goals. Marketing remains the enigma, the elephant in the board room that has no standard processes, universally accepted KPIs or even commonly held beliefs.”
Of the executive team, CMOs have the highest turnover rate, staying in office only 4.1 years on average. New CMOs often want to change the business’ strategic direction which can lead to repositioning, new campaigns, and other costly changes. When the new ideas don’t perform well quickly, frustration can grow between the CEO who has invested in the plan, and the CMO whose vision may require time to come to fruition. These concerns then result in the replacement of the CMO and the process begins again. The more it happens, the less the CEO trusts the marketing department to succeed.
CMOs who want to break this cycle need to start building a transparent relationship with the CEO by defining the scope of the role, responsibilities, and level of involvement in strategy (e.g. how does brand positioning affect consumer drive to buy). To that end, CEOs and CMOs should have an open, honest discussion about measurements of success, level of authority to do what is needed to achieve the goals, and what outcomes the CEO and CMO want to produce.
Impact over impressions
The number of impressions your advertisements achieve ultimately does not translate to revenue gained. While the figures may be huge and worthy of celebration within your marketing team, CEOs and other executives want more literal translations of success. The impact of your marketing plan on market share, ROI, and the bottom line matter more than how many people saw the ad, so it is critical that the CMO build a relationship with CEOs in a language they both speak.