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What the CEO Really Thinks of Marketing
Most CEOs do not understand marketing and see it as a cost center that may not provide clear returns. Marketing can protect itself by clearly demonstrating its value in making sales easier through helpful initiatives, using metrics to show impact, being accountable for goals, and periodically conducting ROI analysis to show how marketing influences sales over time in business-to-business environments.
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What the CEO Really Thinks of Marketing
- 1. What the CEOReally Thinks of Marketing and 5 Things You Can Do About ItDave Kelloggwww.kellblog.com
- 2. Intro and DisclaimersIntroTechieturned marketerProduct marketing VP marketing CEORan marketing at BusinessObjects for 9 years during growth from $30M to $850MCEO of MarkLogic from $0 to $80M run-rateDisclaimerB2B background and biasDuring Q&A let’s see how we can apply these lessons to consumer-oriented businesses
- 3. Let’s Cut tothe ChaseWhat does the CEO really think of marketing?
- 4. or more specificallyWhenmost CEOs think marketing, they think this
- 5. John Wannamaker’s FamousQuote “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
- 6. Scott McNealy AtSun’s Ten Year Anniversary CelebrationThanks to engineering for building our fine productsThanks to sales for selling our systemsThanks to customer support for servicing our customersThanks to finance for accurately recording our profit and lossThanks to facilities for maintaining our fine buildingsThanks to IT for running our internal systemsThanks to marketing for … whatever it is they do.
- 7. Business Objects GMQuote“Until I hired Charles, I must secretly admit that I never felt comfortable spending money on marketing.”
- 8. Why?Most CEOs donot understand marketingFew CEOs have worked in marketingMost come up through product or salesMarketing costs a lot of moneyMarketing spending is usually variable / discretionary cost … and easy to cut in a pinchMarketing delivers ambiguous returnsMarketing agencies like bravado and the implication of voodoo and black magic (“marketing guru”)(We do it to ourselves)
- 9. Why?“If I hirean incremental salesperson, I get $1.7M. If I hire an incremental marketer, I get <what>?”I have a strong marketing backgroundI have been a CMO for over a decadeI believe in marketingI consider myself a marketing personI confess to having had this thought
- 10. The Even-Darker CEOThoughtThe board wants 6 more points of operating marginI wonder if I stopped marketing completely would anybody even notice?
- 11. What Can WeDo About It?Remember my marketing existsMeasure helpfulnessBe metrics drivenBe accountableDo periodic ROI work
- 12. 1. Why DoesMarketing Exist?If we had a three-person company, what would we have?1 founder1 developer1 salesperson“Code, sell, or get out of the way.”
- 13. Why Does MarketingExist? Why might we add marketingLet’s not have every salesperson make his/her own slidesLet’s be consistent in what we tell peopleLet’s generate leads for sales so they can focus on sellingSomeone needs to build the websiteLet’s capture that technical message in a white paperLet’s get the word out so sales isn’t calling on cold prospects…Marketing exists to makes sales easier
- 14. Make Sales Easier Ifirst heard this a product manager in 1987 from Chris Greendale (who went out to found CTG)I embraced it and used it as a mantra that drove my marketing career from product manager to CMO of a $1B companyIts simplicity is disarmingIt does not imply that marketing is tactical and not strategicDesigning products that sell more easily in is includedStrategic acquisitions (e.g., of competitors) are includedUse this as a North Star to orient your organization
- 15. 2. You CanMeasure HelpfulnessPeriodic marketing internal satisfaction surveyWhat tools have you used and to what extent are they useful?How is our marketing in an absolute sense?How is our marketing compared to other companies you’ve worked at?Please allocate 100 units of marketing resource to these categories of spend?What do you think of the website?What percent of your leads come from marketing?If you could change one thing in marketing, what would it be?Use the same research techniques on your internal customers as on your internal ones
- 16. The Ever-Popular PeopleQuadrant% wouldwant to take on salescallBest-kept secretsSuperstarsThe packSoon to be formeremployees% awareness
- 17. Get Respondee DemographicsHavelong have you worked at the company?How long have you worked in the industry?Did you make your quota last year?Enables slice-and-dice which can reveal very interesting patterns
- 18. The Helpfulness Keyis Intelligent DebateAny idiot can show up and say “what do you want” and then do itA value-added marketer challenges sales during the conversationA “tough love” conversationI know you think you want that, but I think you don’t. Let me explain why.You are my customer, and I am not a doormat
- 19. 3. BeMetrics-DrivenCould be a two-hour speech in itselfUse systems like Salesforce for leadsand opportunities and Eloqua or Marekto for incubationReport back on these metrics (e.g., at ops reviews)Do not gag your audience with dataShow them data; talk about insight and actionOur top 5 campaigns were … and we are going to … Our bottom 5 were … and we are going to … as a result
- 20. Easy Areas forMetricsWebsiteAdvertising / adwordsLeadsPRSalescallsSupport callsSpeechesAnalyst meetingsTrainings…
- 21. Take an IntelligentApproach to MetricsDon’t be a metrics slaveNever do stupid things in the name of driving a metricDon’t incent your people blindlyThinks of metrics as a cockpit / dashboardNeed to look at multiple panels to understand the situationAsk good questions that close loopsTest your “knowledge”Do our A-scored leads actually convert at a better rate than the Bs?Hire a quant – if you’re not one, then get one
- 22. 4. Be AccountableOneof the fundamental tensions between sales and marketing results from marketing’s perceived lack of accountabilitySales feels (and usually is) highly accountableMarketing can be perceived as a country clubOne way to make yourself more accountable is to publish goals and do quarterly assessment (e.g. , at ops review)They will never see you as accountable as themselves, but they will appreciate the effortAnd it’s a best-practice anyway if only for alignmentWait a minute, you’re cancelling the XYZ! We love that!
- 23. 5. DoPeriodic ROI WorkMost B2B sales processes are complex and involve multiple touches to multiple individuals from an organization over the course of months and yearsMost ROI studies are not believed by the people who read themEither on a external or internal basis(Aside: prefer ROI tools to ROI calculations for external use)Ergo measuring ROI of B2B marketing is extremely difficult on a forward basisWhich programs lead to which sales?
- 24. Do Periodic ROIWorkI prefer to periodically run it on a backwards basisWhich sales were influenced by which programs?Marketing-influenced pipelineHelps the organization understand the difficulty of the problemDo not count angels on pinheadse.g., use surrogates like credit the last program or the first contact or the first program, etc.
- 25. SummaryMost CEOs don’tunderstand marketingAll CEOs worry that marketing money is wastedMarketing money is usually variable and easy to cutMarketing can proactively protect itself from the “I wonder if we stopped doing this would anyone care” question that the CEO will occasionally considerMarketing can do this byRemembering why it existsMeasuring helpfulnessBeing metrics-drivenBeing accountablePeriodically doing ROI work