CMOs today must drive revenue growth, leverage new channels like mobile and social, and optimize the marketing mix across channels. At the same time they need to reduce agency spending, eliminate waste, and reduce costs. I’m exhausted just thinking about it. And that’s not all. CMOs also need to increase accountability among their teams and better harness analytics. So said Research Vice President Kimberly Collins during her presentation at the Gartner Customer 360 Summit.
So how can chief marketers manage the bottom line for marketing, decrease costs while improving the top line, and increase revenue from marketing? Collins recommended starting with marketing resource management (MRM), rethinking campaign management, and updating KPIs.
She cited five competencies for MRM:
- Planning and financial management: Don’t spend just because you may lose budget at end of the year. Additionally, track all spending; organizations can see a 5 to 20% cost reduction by tracking costs.
- Creative production management: Focus on workflow and process automation, including reduce cycling times help to go to market faster and increase revenue. Improvements in this area can lead to a 10 to 60% improvement in productivity.
- MRM analytics: Use analytics to get a better understand of your marketing resources, costs, and related areas to make more informed decisions that will help to improve MRM over time.
- Marketing fulfillment: Rethink print collateral, which ages quickly; use print on demand to reduce waste and increase relevance and accuracy. Doing so can lead to a 15 to 75% reduction in marketing waste.
- Marketing asset management: Don’t give ownership of your marketing assets to your agency; own your own assets. In addition, use user-generated content when appropriate. This approach can help reduce agency spending by 10 to 15%.
“Once you manage your marketing expenses, you’ll have more money for the fun stuff,” Collins said.
The fun stuff: Campaign and lead management, which are the foundation for growing the top line, she said. Here, she added, chief marketers need to focus on multichannel marketing. This includes segmenting and targeting customers; coordinating outbound, inbound, and event-triggered marketing; optimizing on- and offline channels; improving the two-way dialog with customers; and generating, collecting, qualifying, prioritizing, augmenting, and distributing leads. “Don’t sacrifice quality for quantity,” Collins said regarding leads. Doing so can reduce conversion rates and you still won’t meet your numbers, she noted, adding that improving lead management processes can drive 25 to 75% conversion rates.
Other benefits to improving your campaign management strategies: While targeted outbound campaigns get 1 to 3% response rates, event-triggered campaigns typically get 20 to 40% response rates and inbound marketing campaigns get 40 to 70% response rates.
Another asset campaign management provides is the ability to do attribution analysis. This will help decide how to reallocate your marketing spending based on how channels are performing, Collins said. Even if you attribute 100% of revenue to sales, you still need to know what channels got the customers to those salespeople, she noted.
So how do you manage marketing performance and calculate marketing ROI? By looking at the two halves of efficiency and effectiveness, Collins said.
Start by creating KPIs in both process areas and strategic areas. Consider campaign management as an example: Process KPIs could include campaign response rates; strategic KPIs could include revenue attribution to campaign and channel used, profitability of a campaign, or campaign ROI. For creative production: a process KPI could be percentage decrease in time to market, while a strategic KPI could be the cost savings from creating operational efficiencies. Marketers should also have KPIs for lead management, creative production management, marketing fulfillment, and integrated planning and financial management.
But be careful what you measure, Collins warned. And always have a backup if your measurement isn’t working out as planned. Remember: Staff will do whatever it takes to meet the KPIs—even hang up on customers—especially if there’s financial incentive tied to it.
Collins recommends that marketers develop an analytics ascendancy model for marketing: start with descriptive (what happened), move to diagnostic (why), then on to predictive (what will happen), and finally, prescriptive (what, when, and why) analytics. As you move up, you increase marketing optimization, she said.
Additionally, when optimizing the marketing mix, Collins said to walk then run. First optimize for individuals (offers), then for campaigns (channels), and then across direct campaigns and channels (targeted campaigns), media used (media mix), and finally, resources (people and budgets).
Ultimately, marketers need to combine customer understanding, customer engagement, and delivering on their promises to do all this successfully—and become the chief marketing/accountability/revenue/ technology officer companies need today.