Lisa Nirell's Marketing Waves Blog

Why Marketing ROI Often Misses the Point

marketing ROIIt was a crisp fall day in October 2000. I was preparing for a big presentation to the leadership team in Microsoft’s Redmond, WA headquarters. As an outside consultant working for Siebel Systems, I needed to prove myself quickly, and demonstrate that we were generating a solid marketing ROI for them.

This was an exciting career moment for me. I was the first Global Account Team leader in Siebel’s history. I led an effort to develop a global account plan to help us manage and expand our seven-figure relationship with the client (think of this as an early form of account-based marketing).

At the time, Microsoft was a fast-moving train and had little patience for timid, inexperienced consultants. I needed to nail this presentation. Millions in future revenues were riding on it.

We set two goals for this executive session. First, we wanted them to commit to working with us on a broader scale. We would start by explaining the value we had delivered for three consecutive years. Second, we needed to increase awareness of our full range of service offerings. We were eager to expand our footprint within the account.

The Microsoft executive team sat behind a rectangular table inside a sterile, windowless conference room. I stood in front of them and showed them our slick PowerPoint slides—38, to be exact.

During my short presentation, I proudly outlined how many workshops we led across the globe. In the spirit of transparency, I also delivered some disappointing news:  although hundreds of Microsoft global employees and partners had attended our programs, we had few business results to show for it. We could only point to high scores for buckets of workshops. Our teams generated lots of activity and good smile sheets. Those were anemic results to show from their $2M investment. 

At that moment, the mood shifted. The Senior Vice President — our economic buyer – spoke loudly. He said “Why didn’t someone bring this issue to my attention sooner?”

We left that meeting without any client commitment to a new and refreshed relationship. I simply missed the point of any initial executive meeting: to establish rapport and trust FIRST by asking what mattered to THEM. They could care less about our “activity metrics.”

Within 24 hours of that fateful meeting, Microsoft’s Training Manager swiftly called my boss in Atlanta and asked that I be removed from the account.

How many marketing leaders are missing the point, too? In my experience, several are rushing to a marketing ROI discussion. It’s tempting because we are surrounded by marketing technology solutions that generate slick dashboards. Business leaders are expected to move quickly and reward agility.

In practice, however, we all need two behavioral dynamics to work in harmony: relationship-building and strategic insight.

Eric McCarthey, a partner at Crestlight Ventures, 30-year veteran of Coca-Cola, and a seasoned board member, agrees. He currently serves on multiple boards. McCarthey understands the rapidly changing board roles and expectations, and the implications for marketing leaders.

McCarthey believes that “the days of boards standing on the sidelines—known as the ‘nose-in and hands-off’ approach—have ended. Furthermore, CMOs must possess a balance of analytic and intuitive abilities.”

Today, board members join CEOs and CFOs in strategic planning and reviews. These recent shifts require marketing leaders to be well-prepared. They need to build rapport with board members, and engage in strategic discussions that were not as crucial in the past.

In retrospect, I wish I had prepared differently for this meeting. I would have asked Microsoft leaders these 5 questions:

  1. Why do we need this data? (What is the strategic imperative?) Many times, we forget to first ask our Board or CEO “WHY?” before we run off to chase data. It’s a totally legitimate question, when asked in a caring way. Asking WHY offers another benefit, too. It can be powerful path to clarity.
  2. What are the 3-4 critical goals in our company’s strategic plan? How closely aligned are our marketing plan/activities around those goals? That helps you start filtering potential KPIs/goals.
  3. Do our metrics align with the stage of growth we are currently facing across our portfolio? If we are building KPIs around a product that launches in 3 years, they will be different than our current offerings. In my latest book, I explain McKinsey’s three phases of growth for every product or service, and how marketing metrics must change across the continuum.
  4. What type of CMO does our company need right now? (Am I the right leader for it?) Professor Kim Whitler just published a worthwhile and timely Harvard Business Review article on the three common types of CMOs in the world of modern marketing. They include: Enterprise-wide P&L role (designing strategy, commercialization, distribution, and communications), Strategy role (designing the growth strategy, customer insights, and innovation), and Commercialization role (think VP of Demand Gen and Content). Different CMO profiles require different marketing ROI conversations and metrics.

Whitler found that nearly half of today’s CMOs fall into the Commercialization role. In my experience, that is accurate. Unfortunately, many hiring managers and CEOs obsess over marketing qualified leads, pipeline growth, and revenues–common metrics in a Commercialization CMO’s toolkit. That wholesale approach leaves brand repute, product design, and customer insight metrics in the dust.

Every marketing leader needs to honestly assess their own strengths, determine if they are in the right role to meet the required corporate objectives, and push back when their peers demand a “one size fits all” marketing ROI and commercialization CMO model.

  1. What are we committed to STOP doing to achieve these performance goals? Marketing is often the dumping ground for anything customer, brand, or demand creation. Most marketers want to please everyone. Our best clients have added a “Stop Doing List” to their strategic plans, and review it quarterly. It keeps them fresh and allows them to re-invest poorly performing funds elsewhere.

The next time your leadership colleagues ask you to design a dazzling dashboard for an upcoming board meeting or leadership retreat, take a breath. Don’t assume you have all the answers to these 5 strategic areas. If you do, you might drop the ball during the presentation of a lifetime.

As my friend Daryl Conner says, “Clarity of mission shortens the discussion.”

Copyright 2017, Lisa Nirell. All rights reserved.

Related posts:

Why Too Much Focus on Marketing ROI Can Limit Growth

My FastCompany blog: 6 Ways Marketers Can Weather Any Storm with their CFO

ForbesCMO: Five Competencies that Enable CMOs to Effectively Communicate with Boards

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