3 Steps to Achieving Strategic Marketing Relevance
W. Sean Ford, senior VP and CMO, LogMeIn
Strategic relevance for marketing organizations is a choice. Many marketing organizations either fail to understand this or don't know how to position themselves to achieve relevance within their companies. Even fewer marketing professionals realize that being strategically relevant is a choice that they own. This point should be comforting because the steps to becoming strategically relevant are completely within the marketer's control; they include: redefining marketing in a strategically relevant way, aligning marketing goals with the performance of the business, and measuring performance rigorously and consistently for the results that matter most, like pipeline, bookings, and revenue.
Step 1: (Re)define marketing for your organization
Put a stake in the ground today. Define (or redefine) marketing clearly, singularly, and measurably for your organization and for the company as a whole. Often the marketing organization is defined passively by the collection of soft, anecdotal legacy perceptions held by others, or as a cost center. The definition for marketing that I've developed and shared throughout my career as a CMO is as follows:
Marketing is an integrated and balanced ecosystem for targeted demand generation, relationship building, thought leadership, and field enablement—focused on pipeline impact and closely aligned with sales strategy and the revenue priorities of the business.
The key concepts to highlight here are the balanced system view of marketing made of mutually reinforcing investments, the focus on measuring pipeline and revenue, and the alignment with the strategic priorities of the business. By defining what you stand for as a marketing organization you set the basis for conversation in your company, and, more important, your team understands that priorities and investments have the singular focus of positively impacting the economics of your company as a whole.
Step 2: Align with corporate strategy
Executing against events, plans, and campaigns because they're simply in the calendar is common. However, if one is to position marketing as a business driver, there's a need to continually evaluate and redefine your go-to-market approach in support of the finite set of overall business objectives the company has for the year. The degree to which these business objectives are known and established is inversely proportional to the amount of flexibility you need in your marketing organization's plan. While some degree of flexibility is always required to maintain strategic relevance, basic objectives and measurable outcomes must be defined to lead the business and know what to measure and determine if you're contributing positively to the business.Step 3: Cascade performance from pipeline
Every business and industry has different performance metrics that they deem important to driving success. Cost per lead, CAC, lifetime value, MQLs, and SQLs are usually all tracked as a matter of course in most companies. However, it's easy to find yourself in a situation where you're measuring everything, but understanding relatively little as it relates to the performance of the organization as a whole. In my experience, regardless of your company's business model, products, or services, the universal path to relevance begins and ends with one thing: marketing contributed pipeline. To what extent is the collection of functional areas in your marketing organization focused on—and contributing to—the building of pipeline (and revenue) for the company?
Start by setting the pipeline contribution target for your organization. A larger enterprise technology company, for example, might set a target range of 20 to 30% of marketing contributed pipeline. In any case, this target should drive all of the other performance measures in the marketing organization and should be measured on a weekly basis with a view toward the quarterly revenue/bookings number. Alignment of success with business performance is a critical prerequisite to becoming strategically relevant.
Once you have an estimation of marketing contributed pipeline, several other measures should cascade from there. Pipeline coverage multiples using revenue targets by product, country, or region start pointing out strengths and weaknesses in the likelihood your company will meet its objectives. Weighing the pipeline by probability of success in a given period adds another predictive indicator of success. Conversion ratios of pipeline to revenue (or bookings) give a marketer the ability to understand whether the marketing mix should focus more on conversion of business or the building of additional pipeline, and to adjust accordingly. Finally, taking each marketing initiative and comparing the investment made to the pipeline generated allows for real-time evaluation of the contribution of specific initiatives to the business as a whole.
The common threads along the path to strategic relevance all come together around pipeline and your ability to build it or convert it as a total marketing system. The path to strategic relevance is straightforward: Define your marketing organization as an ecosystem of demand creation, align your mix to pipeline creation and business performance, and then measure everything you do according to its impact on the topline results of your business.
W. Sean Ford is senior VP and CMO at LogMeIn