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These Four Data Points Demonstrate Marketing ROI to the C-Suite

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The average tenure for a CMO fell again last year: CMOs at 100 of the top U.S. brands held on to their jobs for just 42 months in 2016, down from 44 months in 2015, according to a recent Wall Street Journal article. In highly competitive sectors like technology, CMO tenure is likely even shorter.

High expectations might account for why CMOs have the shortest tenure in the C-suite, combined with an urge to start afresh when revenue performance falls short. To prove Marketing's value—and their own—CMOs must claim their place in the value-creation chain—and prove it with numbers in today's data-driven economy.

It's also crucial to build relationships with other company officers, and data can help there, too, delivering insights that CMOs can use to collaborate with CEOs, CFOs and sales leaders for better business outcomes.

So here are four essential data points that CMOs can use, along with relationship-building strategies, to demonstrate Marketing's value (and lengthen their own tenure).

1. Funnel Volume


Analyzing sales funnel volume tells you whether your raw marketing effort is sufficient to reach company sales objectives.

Say the goal is to generate $200K in revenue per month, the average deal size is $20K and the sales cycle is two weeks long. That means you'll need to close 10 deals each month. If your conversion from responses to close averages one in 100, you'll need to generate 1,000 responses in the first two-and-half weeks of the month to make your goal.

2. Conversion Rates

Conversion rates reveal performance levels across the sales cycle at every stage. If you generate 2,000 responses and 200 convert to Marketing-qualified lead (MQL), Marketing has a 10% conversion rate from response to MQL.

But that's just the beginning. There are other stages to consider in the sales cycle, including MQL to SAL (Sales-accepted lead), SAL to SQL (Sales-qualified lead), SQL to Opportunities, and Opportunity to closed deals.

It's important to monitor the conversion rates from stage to stage to ensure there is a smooth Marketing to Sales handoff (MQL-SAL) as well as to see where bottlenecks might be occurring. Knowing the overall response-to-close conversion rate is also quite useful as it informs the needed demand generation marketing budget.

3. Velocity

This data point reflects the length of time from stage to stage as well as for the overall sales cycle. Does it take six months to close a deal? Two months? A week? A sense of deal velocity is critical to the overall marketing plan.

If your sales cycle is half a year, your current marketing activities aren't going to have much of an effect on the short-term revenue picture, but that's valuable information to have. You can monitor progress of deals based on the stage-to-stage velocity and compare against a baseline number for a KPI of deal performance.

Such insights may prompt you to explore programs that shorten the sales cycle and accelerate deal velocity. And observing that a deal has stalled at a particular point in the sales cycle is an opportunity to apply sales-enablement programs that can help the deal make progress.

4. Revenue Impact

Volume, conversion, and velocity reveal the state of the sales and marketing operation, but revenue impact justifies marketing spend. Campaign attribution puts a dollar value on the individual campaign's impact on revenue. The idea is to spend more of your marketing budget in areas that are returning the most while spending less (or cutting funding all together) in areas that have little to no return. Campaigns that have poor returns may have merit if adjusted.

Every CMO needs to have campaign attribution information in her pocket, and the best way to achieve it is to measure inside sales' CRM platform. The CRM functions as a de facto standard revenue reporting system, so using sales data confers credibility.

The good news is the technology exists to model campaign revenue impact in popular CRM platforms like Salesforce. Marketers can choose either single touch attribution (such as first or last touch) as well as multitouch models and even customized ones by adding weight to specific touches to align with their approach and campaign objectives.

* * *

With the technical capability to monitor volume, conversion, velocity, and revenue impact, CMOs can direct their team to look for patterns and monitor progress. They can adjust campaigns to ensure that they are producing the required results and invest in the touchpoints that yield the most ROI.

Armed with these data points, CMOs can take their rightful place at the strategy table. By integrating marketing and sales data, marketing executives can align their efforts more closely with the sales team, and the data they generate will have more credibility within the organization.

Data-driven marketers can also forge closer ties with CFOs, who typically distrust the marketing group's analytical prowess but quickly learn to respect CMOs who bring hard data to the table. And CMOs with hard data can become a valued asset for CEOs instead of representing a large expense line item in the budget.

The average CMO tenure might be falling (faster in some sectors than others), but CMOs who can monitor their progress toward goals, make adjustments when needed, and demonstrate the ROI their campaigns deliver can stay out of the hot seat—and build collaborative relationships in the C-suite.


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Bonnie Crater is CEO and founder of Full Circle CRM, a full-circle lifetime management solution provider.

LinkedIn: Bonnie Crater

Twitter: @BonnieCrater

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