John Wanamaker famously said, “I know half the money I spend on advertising is wasted, but I can never find out which half.” This pretty much sums up how CEO’s and CFO’s think about marketing. In the years since this quote, I don’t believe things have gotten much better.
I read an interesting article on how 70% of CEO’s don’t trust their Chief Marketing Officers. If you don’t think this is your situation, you’re kidding yourself. You can read it yourself at Marketing Week Article
Every year, the CEO has to choose how to best invest the company’s money to achieve his growth goals. Everyone is asking for more money than is available. The IT person wants new software that he is sure will improve the bottom line. The operations people want to invest in the plants to improve efficiency. Sales management wants to add more salesmen. HR wants to invest in training. And then there is marketing.
Many departments can make a very convincing case for their project. They say, “If you spend this, the company will improve its performance by this much.” Marketing tends to start with the previous year’s budget and ask for more. Even if this isn’t how you do it, it’s probably how your CEO sees it.
Here’s how to make your CEO a believer in marketing spending.
1. Stop using meaningless terms, like brand awareness. There are only a few of the largest building material companies who can and do effectively measure brand awareness on a regular basis. When most building material marketing people are asked why they are doing something, the answer, frequently, is to build brand awareness. How convenient. No one can say you failed, as no one is measuring the results.
2. Connect with the sales team. Make calls with them, listen to them and ask them what their biggest challenges are. Be specific. Ask them what customers they would like to sell to. Call on those prospects yourself and ask them what it would take to get their business. Ask them what they wish their current supplier could do better. Finally, ask them about their business. What are their biggest challenges?
Once you have this knowledge, you are in a position to help the salesmen succeed. You may have learned how a product or service problem with a competitor has created an opportunity for you. To fully leverage what you learned, your company may need to make some changes in how it does business. It is usually easier for marketing to convince other department heads to make the change than for the sales department to do so.
You may also have learned about a customer’s marketing problem that you could fix. For example, a promotion focused on the customer’s success instead of just on a particular product can make a big difference in your relationship with that customer.
I have found that when you make your customer more successful, two things happen. One, he is more loyal to you; and two, he sells more of your products. If you do this right, you will have the sales leaders telling the CEO that you need more money.
3. Make everything measurable and simple. CEO’s are smart and they know when you are bullshitting them. The added problem is that many CEO’s expect bullshit from marketing.
There should be no part of the marketing budgets that are based on “We have to do it” or “We’ve always done it.” Everything should have a measurable outcome that is tied to sales. Trade shows, ad campaigns, collateral and online efforts should all have a measureable goal that is tied to sales.
You may feel that many marketing programs can’t be measured. If you can’t figure out how to measure them, then don’t do them.
If you want the CEO to be a believer, you need to take these steps and stop acting like the teenager with the keys to daddy’s car.