The advent of technologies that enable marketing to demonstrate its impact on the top line are clearly a benefit to both the function and the larger organisation. But the ability to connect the dots between marketing efforts and revenue generation has shone a spotlight on CMOs and their teams. There is an increasing expectation that marketing will serve as the growth engine for companies.
“We clearly have technologies that allow CMOs to take a level of revenue responsibility they have never had before,” said Debbie Qaqish, partner with The Pedowitz Group and author of “The Revenue Marketer,” in an interview with CMO.com.
Arun Pattabhiraman, CMO of mobile advertising startup InMobi, one of India’s first so-called unicorns, has experienced that shift from marketing being the “make-it-pretty” cost centre of a company to its primary driver of growth. A few years ago, marketing was “purely a brand enabler—a creative function that was responsible for shaping the company’s perception globally through traditional marketing tactics,” Pattabhiraman said in an interview with CMO.com. “While that responsibility has only grown, marketing is increasingly collaborating with sales and product organisations to figure out meaningful ways to affect revenues directly.”
At analytics software maker Looker, marketing delivers 90% of overall revenue targets with the qualified leads it delivers to sales and the appetite for revenue-generating insight is insatiable. “CEOs expect that CMOs can easily analyse exactly how marketing is contributing to the bottom line,” said Looker CMO Jen Grant, in an interview with CMO.com. “When CMOs have access to data, everything changes.”
But while corporate leaders are looking to the CMO for growth opportunities, the marketing function certainly does not own all of the organisation’s growth drivers. As many as five C-level executives are responsible for driving new revenues, according to a recent Accenture Strategy report. However, CEOs are most likely to hold their CMOs accountable for missed growth targets.
“The CMO as chief growth officer is a tough expectation to live up to because CMOs have to do it with one arm tied behind their backs,” said Robert Wollan, Accenture Strategy’s senior managing director, in an interview with CMO.com. “It’s a tough job.”
Taking responsibility for revenue generation is a big risk for CMOs, but one with equally outsised rewards for those who can figure out how to navigate this new terrain. CMO.com talked to marketing leaders for their thoughts on how to meet the new growth imperative.
1. Launch An Internal Revenue Marketing Campaign
CMOs need buy-in from the entire organisation if they hope to influence those revenue drivers they don’t control. “Marketers can make this shift,” Qaqish said. “But they have to change others’ perspectives about what marketing can be.”
Communication is key to getting stakeholders to cooperate on the growth agenda. CMOs already have the skills required in creating personas and messages that resonate. The head of sales wants to know how marketing can help him to meet quotas, shorten sales cycles or increase deal sizes. The CFO wants to know marketing will demonstrate returns on investment.
“New technology alone won’t do it,” said Qaqish, who has worked with Microsoft to make this transition over three years. “It’s an educational campaign.”
Even at MediaMath, a marketing tech company built on the idea of marketing as revenue-generator, CMO Joanna O’Connell has had to update assumptions about marketing’s role. “You may find that some have very traditional notions of marketing and others have no idea at all how to make sense of marketing,” O’Connell told CMO.com, adding that she has developed a closer relationship with her CFO. “Rather than assuming, show them. Turn sceptics into allies and advocates using data and storytelling.”
2. Break Down Barriers
The more siloed a company’s functions are, the harder it will be for marketers to “put their arms around all the pieces” to spur growth, Wollan said.
“To activate the key combination of creativity and data produced by your business, CMOs must partner with the sales, finance and IT departments in deeper, more meaningful ways,” said David Gee, CMO of subscription billing company Zuora, in an interview with CMO.com.
The marketing-sales relationship can be tricky. “Building out a framework where marketing begins to affect the bottom line can make other functions feel uncomfortable or threatened,” Pattabhiraman said. “But the more marketers talk openly and objectively and evangelise the vision behind the transition, the more sales teams begin to perceive them as a valuable partner.”
O’Connell said she works closely with commercial and product leaders. “If we understand each other’s business goals, challenges, structure, resources and assets,” she said, “we can work together toward shared goals.”
3. Change Your Language
The more marketing can position itself as a revenue driver, the easier it can be to grease the wheels required to make this approach work. That includes talking about marketing budgets in new terms.
“By positioning marketing as a growth engine rather than an expense, it’s much easier to make the case for incremental budget,” said Aaron Goldman, CMO of media technology company 4C. “Instead of asking, ‘Can we have an extra $100,000?’ marketers can ask, “Can we handle 2,000 more leads?’”
4. Master Your Data
CMOs are sitting on more data—about customers and marketing’s impact—than ever before. But they need platforms to turn that data into insight. Goldman’s first order of business was building an attribution model showing marketing’s contribution to revenue. “We had to map out the customer journey and figure out how we could affect each stage and tie our efforts to leads, wins and upsells,” he said.
Data wrangling is unglamorous but enormously valuable. “The perception that data is now easily available is not accurate for most CMOs. Most companies suffer from data chaos and marketers suffer exponentially,” Looker’s Grant said. “Data is held in different silos … that are difficult to connect.” CMOs must invest in the technologies required to integrate data across the enterprise.
Then, “it’s imperative to have metric-driven conversations with all stakeholders within the company—frequently,” Pattabhiraman added. “When marketing conversations get metrics-driven, it’s hard for others to ignore [its] business impact.”
5. Make Room For Innovation
Most marketing organisations still focus primarily on traditional capabilities, spending an average of 37% of their time on innovation, according to Accenture Strategy. But growth doesn’t come from sustaining the status quo.
At video collaboration company Lifesise, CMO Tiffany Nels has let go of long-term planning and campaigns to foster greater agility. “Today’s digital landscape requires marketers to be smart and fast. We must operate our business in terms of hours, not weeks or months,” Nels told CMO.com, noting that she monitors data daily to make sure marketing is meeting goals. “If we are, we can course correct in real-time. We can test things, fail fast if necessary and move on to the next idea.”
6. Don’t Delegate Growth
Parsing out revenue responsibility is a mistake, said Qaqish, recalling a CMO who knew too little about the revenue generation platform his VP had created to communicate effectively with the executive team or the board. “You don’t have to be in the weeds, but it’s not something you can outsource and just check in on once in a while,” she said.
That requires CMOs to grow themselves. “To survive and thrive in a world where I’m truly accountable to the bottom line, I’ve had to develop my technical and analytical skills,” Goldman said. “I always prided myself on creativity and writing, but I’ve had to get comfortable with data and details to be effective as a modern-day CMO.”