Happy New Year! The beginning of every new calendar year affords us the opportunity to look back, reflect and set some bold priorities for the year ahead.
As we move into 2017, there are four key changes occurring in our business environment that will affect every CMO’s list of priorities within B2B organizations. Although buzzwords, news and trends come and go year over year, these four issues affect the one constant in a marketer’s life: the need to create revenue.
Maximizing marketing’s contribution to revenue is the basis for Marketing Performance Management (MPM), which Forrester defines as “a discipline that governs goal setting, monitoring, and continuous optimization of marketing’s contribution to revenue and other priority business goals.”
In 2017, this is a bigger priority than ever in B2B organizations. For today’s marketers, MPM is not an “opt-in” deal. It’s an ever-increasing reality for high-performing marketers with the following four issues at its core:
1) A strong grasp of marketing budgets.
Marketing budgets are under greater scrutiny in 2017 than ever before. According to Gartner, marketing budgets are on the rise by up to 12 percent as marketers manage more demand and take on more responsibility.
But this also warrants the need for marketers to answer tough questions about their budget related to plans and returns. They are promising more to the business with every dollar spent.
Define exactly how you’re planning to deploy available budget – on what, where and when. Campaign for additional funding where required with support from data and external benchmarks. Know how many inquiries, leads or opportunities were generated by your campaign tactic, and at what cost. Understand what’s working best. (Get more tips: “4 Stages to Better Marketing Performance.”
2) Alignment with the CFO
We’ve been talking about marketing and sales alignment forever it seems, and progress has absolutely been made. But the relationship between marketing and finance is just as important, and frankly, often overlooked. CMOs risk alienating an important ally in the CFO if they only focus on the CEO/sales relationship.
Finance holds the purse strings, controlling the investment and budgeting decisions of organizations. It’s also responsible for understanding what the results are — and will be — and who’s responsible for what. The role of a CFO is changing significantly, as CFOs now influence future direction of companies. As marketers work to secure a more strategic role within organizations, this relationship must be lock-tight.
Our new benchmarking research on Marketing Performance Management shows that high-performing companies are 3X more likely to have a strong relationship between the CMO + CFO.
If the CFO sees marketing as a strategic lever, marketing will have more budget, power, flexibility, and a stronger voice. However, if the CFO sees marketing as a cost center, you are instead fighting budget cuts.
3) A clear understanding of data along the customer journey
There’s a reason why marketing ROI has been so elusive: investment data and results data typically live in separate, disconnected systems. Bringing them together takes a lot of grunt work, with our research showing that more than 80 percent of organizations are still using Excel in some way to track their impact on the business. Yikes.
This leads to guesswork as to where marketers need to spend more money, and confusion as to where they need to preserve resources. This year, let’s take steps to clarify what investments lead to results so we can make better planning decisions within the customer journey.
4) Job security
Forrester reports that 30 percent of CEOs will fire their CMOs in 2017. And the number goes up if the CMO has been on the job for more than two years.
Don’t panic! This just means the expectation level is rising for what it means to be a strong CMO today. Marketing leaders with a seat at the executive table are expected to run their departments like a business – that means demonstrating stewardship over marketing investments, making investment decisions with confidence and earning a more strategic role with an ability to demonstrate impact. Those who are unable to do so will be out of a job.
Are you prepared for the charter of a marketing leader in 2017?
James Thomas is the CMO at Allocadia, leaders in Marketing Performance Management software and helping marketing teams achieve better planning, budgeting and ROI.