Three Marketing Arguments Your Company Must Have
Don’t argue about ads. Argue about effectiveness.
It’s tempting to think that the most important marketing arguments you’ll have are the ones about what customers and prospects are going to see.
You’re wrong.
For a lot of companies — especially in a service economy — marketing is the only tangible representation of the organization’s hard work and dedication, so the creative work is both visible and personal. That’s why marketing generates such passion and why we “argue” about marketing while we “discuss” other areas of business. It’s also why companies that put together a 25-page project plan for a $50,000 software upgrade often manage a multi-million dollar marketing budget based on feelings.
Instead of focusing on what marketing is doing, shift your passion to arguments about what marketing should be doing and why they should be doing it.
Think of it this way: do you debate the finance team on individual expenses? Maybe, if they’re out of the ordinary, but you probably spend the majority of your time on budgets, expense guidelines and overall performance management. Foundational stuff. Directional stuff.
Why aren’t you doing the same with marketing?
Whether you’re a CEO, a C-suite executive with responsibility for marketing, or even the actual head of marketing, before you suffer another meeting about why you’re not on TikTok yet, wrestle with these three questions first.
· What do you want your marketing team to do?
· Where does marketing fit in your organization?
· How will you measure marketing’s effectiveness?
While they seem simple, these questions should actually result in some robust discussions. Apply the same passion here as you would to a review of an ad campaign; after all, you’re putting edges around your marketing function, and that means some people aren’t going to get everything they want. (At least not right away.)
There are three big payoffs:
· Marketing is established and managed as an accountable business driver
· Performance can be objectively assessed
· Marketing has the opportunity to do great work
And if you’re worried about arguments creating lingering bad feelings, I’ll remind you that CMOs and marketing people are experts at scheduling happy hours. (Plus, I promise, everyone will still get to give their opinion on the next ad campaign.)
Argument #1: What Do you Want Your Marketing Team to Do?
Did you ever wonder why Wall Street bankers celebrate big deals at Peter Luger’s instead of the Cheesecake Factory?
(OK, you’ve probably never, ever wondered that. Work with me here — this blogging thing is harder than it looks.)
According to their website, the Factory’s menu includes more than 250 items “made from scratch.” Peter Luger’s has 31 including desserts and appetizers…and five of those items are “steak”. Yet I feel confident saying that a Goldman Sachs expense report has never included a Cheesecake Factory receipt. Why?
Mediocrity doesn’t make an impact.
Ask people in your organization what marketing does and the answers will probably feel a lot like a night at the Cheesecake Factory.
- Sales Exec: “They helped with that PowerPoint for that new business pitch.” (Or, “I had the shrimp and chicken gumbo.”)
- Product Exec: “They make sure the direct mail campaign goes out on time each year.” (“Me? I had the Thai coconut lime chicken.”)
- HR Exec: “I asked them for help with a recruiting ad and wordsmithing the mission statement.” (“I wanted the huevos rancheros but they said it was only available on Sundays.”)
Everyone kind of got what they wanted, but it was pretty forgettable and really not worth what they paid. And did anyone actually order the cheesecake?
For marketing to have the impact you expect, you have to choose what you want it to be great at and then focus. A few thought starters to help you decide:
- Do we depend on marketing primarily for lead generation, sales support, cross-selling or retention? (You can pick something else if you like… the operative word here is or. No ands allowed.)
- Is it more important for us to have a broad marketplace presence, or deep relationships in a specific niche?
- What does our sales cycle look like? Who’s accountable for what customer actions?
- How much are we willing to spend on marketing?
An important point here, especially for a smaller organization, is you’re not trying to build a marketing function that’s only capable of doing one thing. I mean, what’s a good steak without a chopped salad beforehand and creamed spinach on the side? You’re deciding on what you want marketing to be great at, and where you want them to spend most of their time and resources.
You’re not trying to build a marketing function that’s only capable of doing one thing.
You’ll know you’ve done this process right if someone goes away mad. Not “Do we need to call security?” mad — mad like there’s not a vegan option at the steakhouse they didn’t want to go to in the first place. Because that means you’ve created enough focus for your marketers to do Peter Luger work.
Argument #2: Where Does Marketing Fit in Your Organization?
“A CMO walks in to the CFO’s office and suggests a new strategy for holding capital reserves…” is the setup for about three different jokes. “A CFO walks into the CMO’s office with some suggestions about marketing strategy…” is an everyday occurrence. EVERYONE has opinions on marketing, and NO ONE hesitates to share them.
And it seems perfectly harmless until you find yourself on the 13th round of revisions for a digital ad because sales swears that people “use” your product but the data team says that 35–44 year-olds would prefer to “utilize” it and the risk team says that either way, the word “may” has to go in front of the verb no one can agree on. So everyone compromises and your game-changing marketing campaign suddenly centers on the words “world-class” and a picture of a puppy and the CMO moves one step closer to rehab. How the hell did you end up here?
Even after you’ve taken the time to define what marketing should do, there’s still plenty of opportunity for frustration and inefficiency.
In the scenario above, it’s going to fall to the CMO to make some decisions and stop the madness. No one getting paid that much gets to pass off accountability. But smart organizations create the best possible environment for making those decisions by being intentional about marketing’s place in the organization.
If marketing is accountable to everyone (even if it nominally reports to the CEO), don’t be surprised when compromise and defense shape decision making. On the other hand, clear and close reporting to a single area — even if it’s the COO or CAO rather than the CEO — foster bolder thinking, faster decisions and tighter focus on the activities that drive business. Every executive can (and should) still have an opinion, but only one gets a vote.
So, while the conversations will be more difficult than you might expect, debates over:
- “Who does the CMO report to?”
- “Who has the authority to initiate marketing work?”
- “Who has final say on marketing work?”
- “How do we account for the marketing budget?”
deliver far greater value than:
- “Why shouldn’t we have a cartoon lobster dressed as a cowboy as our mascot?”
How Will You Measure Marketing’s Effectiveness?
I’m going to let you in on a well-kept marketing secret. There’s a difference between what marketing claims it can do, and what marketing can actually do.
Most marketers will promise to increase sales, or improve retention or drive revenue if you’ll only approve a few million more dollars in the budget. But in reality, marketing can only contribute to those outcomes.
Wait, what?
Think about what’s between an initial marketing message and a closed sale. At the very least, there’s product design and quality. Did you know that at its peak, Yugo spent more than $8 million on marketing to promote a car that Car and Driver called “inferior to every other car in America”? Not a single dollar of that made the actual car suck less.
Then there’s the sales process and delivery logistics. Plus, to cover the financial impacts of cross-selling and retention, I’d add in customer service and maintenance costs. Marketing can’t be oblivious to these factors (more on that in a moment), but they also can’t directly control them.
At the corporate level, measurement of marketing’s effectiveness should be rooted in what marketing contributes to the entire sales process: getting the greatest number of the best prospects to engage with your company as efficiently as possible.
To effectively argue about marketing measurement and accountability, a company should consider three types of metrics.
1. The quantitative measurement of what marketing actually delivers.
This includes two types of metrics:
- Those marketing controls independently: Broadly speaking, these are things like the total volume and average cost of sales opportunities. (Yes, there are nuances here… and I’m happy to consult with you on their definition. Here endeth the shameless plug.)
- Those for which marketing has a shared accountability: Lead quality and speed to close are good basic examples. I’ve worked with companies that used lead to quote ratio as the key measure of lead quality; if marketing is engaging people who are more likely buyers of the product, that number will be high…unless there are weaknesses in the sales process.
“But wait,” you’re probably thinking. “What about brand equity? Share of voice? Net promoter scores? All those other measures my marketing team talks about?”
As a CMO, these are important measures — in the same way that advanced sabermetrics like BABIP (“batting average on balls in play” in case you’re wondering…) are important measures to a baseball general manager. The better they are, the more likely you are to be successful. However, they shouldn’t be the end game for a CEO or a leadership team.
Consider: In 2018, my beloved Boston Red Sox won the World Series. I purchased tickets, two hats, a fleece jacket and even a friggin’ Christmas ornament to celebrate.
In 2020, the Red Sox had the highest BABIP in the majors. And finished last in the standings. Such limited excellence has not led me to make the same contribution to the team’s bottom line as our World Series victory. (Although a t-shirt celebrating our BABIP prowess would make a fun gag gift…)
2. The factors that impact marketing effectiveness.
- The performance of the areas on which marketing depends, like sales channel capacity and product profitability levels. If your marketing team is driving more opportunities than you can effectively handle, it’s often doing as much harm as not driving enough opportunities.
- Individual scenarios, like legal issues and product recalls. This is where it’s important to keep marketing in the loop on those privileged and NDA-constrained discussions.
3. How well your marketing team understands your business.
This assessment, unfortunately, is all qualitative and revolves around questions like: Do they understand your products and distribution channels? Do they understand who your target customers are? And I don’t mean can they parrot back what you tell them — are they thinking ahead of you in this area?
If I were going to create some objective metrics, I might try:
- Amount of time CMO spends in his/her office — (Lower is better) — A good CMO is curious in areas beyond marketing, and actively engages individuals at all levels throughout the company.
- Number of people in marketing who get key performance reports — (Higher is better) — Look at your distribution lists for reports like sales capacity, new business pipelines and financial performance. At the very least, all marketing leaders should be on there.
- Number of times CMO/marketing gets told to “stay in its lane” — (Higher — to a point — is better) — Marketing should be as close or closer to your customers and prospects as anyone in the organization. If they’re not sharing what they learn and using that knowledge to inform the work of other parts of the company, you’re wearing sunglasses at night.
Arguing about marketing isn’t bad; it’s just that most companies are bad at it.
As fun as brainstorming and wordsmithing creative work may seem, C-suite execs are unlikely to add value commensurate with the cost of their time and the impact of their opinions.
But when leaders point their passion toward the fundamental expectations and organization of the marketing function, they establish a foundation that drives better, more efficient outcomes.
And yes, every once in a while, you can still weigh in on that new ad campaign.
