How do you make this shift? By Demonstrate marketing’s value to the business, but if you can’t prove it, then your budget is getting cut.
But don’t panic, you’re not alone out there.
40% of marketers find it hard to explain the role of marketing to their colleagues and 54% of marketers believe marketing is poorly understood*.
Which is a shame, as joint research from PWC and CIM showed the UK marketing industry alone, generated £36.5 billion in annual Gross Value Added*.mycim-b2c.cim.co.uk/media/73692/impact_of_marketing_1.pdf
So how do we better communicate the value of marketing to the business?
In simple terms:
1. Turn your marketing data into metrics understood by senior leadership, that shows what you’re delivering to the business
2. Communicate how your campaigns have helped with company growth.
Let’s convert marketing metrics to business metrics. Where do we start, to prove ‘Return on marketing investment ROMI’?
Gartner’s ‘Hierarchy of Marketing Metrics’, goes a long way to help.
Tier 4 and 3 are tactically focussed, looking at campaign metrics: clicks, leads and channel effectiveness. Keep these results within the sales and marketing function.
Tier 2 shifts to customers, how many do you have and what is their value. With customer focus being at the heart of today’s business, this starts to prick up the ears of your board.
Tier 1 Business Outcomes and Goals. The key areas of focus: revenue, market share and EBIT + return on marketing investment as well as longer term customer retention rates.
The fundamental shift is from activities to results. Does the board really need to know how many clicks your digital campaign achieved, or how many sales and revenue it delivered?
Building out your report.
Taking what Gartner’s Marketing Hierarchy recommends and with the help of Mediatool.com, here are considerations for your report to share with senior leaders, that proves your profit centre value.
1.Headline with a clear link to company’s strategic goals
-Show your understanding of what the company’s goals are
-list those goals and show your contribution to revenue, profit, market share and customer numbers and value – use the same language as the senior team.
2. Use Customer value metrics the board value and understand
-new qualified leads
-total number of new customers
-customer acquisition cost
-customer lifetime value
-retention rates
3. Campaign results comparing outcome to goals
-summarise the overall impact for campaigns, rather than detail per campaign
-for example, 5 campaigns drove 100 new customers, resulting in $1m of new revenue. Thus proving how marketing campaigns signed up customers, who delivered revenue for the business.
4. Keep it focused and 5. Only include metrics that matter.
Challenge yourself with the ‘So what?’ question to any results you’re wanting to share, if you can’t answer the question, remove it.
Don’t fall back into the weeds and include vanity metrics from campaigns, above average click rates, think your CEO cares?
5.Close on long term trends and predictions
You’ve demonstrated marketing has delivered value to the business. Now’s the time to look further ahead:
-year on year comparisons
-predictions for next year, how much more value can marketing deliver with an increase in budget?
You’re now viewed and valued as profit centre.
Talk to us for more insights and how we can help with marketing that delivers business value.