Famed author and management consultant Peter Drucker once said: ''Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." However, traditionally in many companies, marketing has been categorized as a cost or — at best — an investment. More than ever, chief marketing officers (CMOs) are under pressure to show the direct contribution of their departments to companies’ financial results, all while their budgets are being slashed.
Tying the results of a marketing tactic to the actual financial performance of a company is no easy feat. You may not have ready access to business performance or transaction metrics to allow correlation. The sheer array of channels and options available to marketers, and the rise of new marketing tactics such as social media, only add to the difficulty of measuring clear results. However, even in the midst of all these challenges, you can show your executives the clear contribution you're making to the bottom line by laying down a clear marketing plan that's designed to address specific objectives.
Where to Start?
According to marketing guru Philip Kotler, there are two types of CEOs: "those who know that they don't understand marketing and those who don't know that they don't understand marketing.'' Although this might be a bit of an exaggeration, getting your CEO on your side can definitely help your marketing department thrive in ROI-driven times.
Not every marketing department has direct access to its company's CEO, but they should try to understand the key drivers of this top executive to better support his or her overall strategies and goals for the organization. In their book “Marketing Champions,” Roy A. Young, Allen M. Weiss and David W. Stewart outline these questions to help you get started:
- What does this top executive know and appreciate about marketing?
- What does he need from marketing in order to execute strategic directions?
- How can marketing help improve performance on companies’ key performance indicators?
- What keeps him awake at night?
If you don't have direct access to your CEO, examine recent speeches or articles to gain some insights into his goals. Your own annual report may give you information about specific strategic objectives for the company which must be supported by your marketing initiatives.