CEOs Lack Confidence in Marketing Analytics
As CMO tenure continues to erode, the importance of a marketing analytics strategy tied to business goals is no longer a goal, it’s an absolute necessity. A Fournaise Marketing Group survey discovered that 80% of CEOs do not trust their marketing teams. Another survey reported that 73% of CEOs believe “Marketers lack business credibility and are not the business growth generators they should be.” Now I am obligated to point out that these surveys were conducted in 2012 and 2011, which is a lifetime in the current marketing environment. Although these studies are dated, I remain surprised by how often I hear these exact concerns from CEOs today.
This lack of confidence may be evidenced in 2016-2017’s declining marketing budgets. Gartner found that marketing budgets declined from a peak of 12.1% of company revenue in 2016 down to 11.3% of revenue in 2017. The annual CMO Survey released in August 2017 reported that marketing analytics spending actually fell in 2017 and seems to reflect the decline in overall marketing budget during the same period.
The latest CMO Survey released in August 2018, shows that the marketing analytics budget dip has recovered and now meets late 2015 and early 2016 investments. And notice the 3-year projection in the upper right corner. If you aren’t focused on marketing analytics, you soon will be.
With trustworthy marketing analytics being central to driving growth and proving return on investment to build executive trust, it is no surprise that Gartner predicted that marketing analytics would be the number 1 area of CMO spending in their 2017-2018 survey, commanding 9.2% of the total marketing expense budget.
What Marketing Performance Metrics Does a CEO Care About?
Marketing analytics should be tied to business goals and resolve key executive-level questions and not focus on a collection of your best tactical data. Gartner says that there is evidence that marketing leaders are either “Too nearsighted to be strategic or too visionary to deliver against marketing’s objectives,” and this results in focusing on metrics that really don’t matter to the executive leadership team. Although website traffic, bounce rates, email open rates and landing page conversion rates are valuable, tactical indicators of performance, they don’t answer common executive questions about revenue growth and customer retention on their own.
Seize the Opportunity to Lead Analytic Transparency in Your Organization
A valuable marketing analytics strategy relies on a comprehensive view of your customers. Remove the data silos between marketing, sales, customer service and operations to get a full view of the customer journey within your organization. Combined with marketing costs, the multiple data points you collect from other departments will help you deliver a clear picture of revenue attribution, customer acquisition costs, and the impact of customer churn while also improving your tactical marketing efforts and delivering rich insights that uncover viable opportunities for growth.
Marketing technologies track the front line of customer data, and when combined with data from other departments, give marketing leadership the opportunity to champion and own the customer acquisition analytics and reporting for the organization. Tailor your analytics and reporting strategy to fit the organizational structure and allow for transparent access to data. You never know when a piece of data will uncover an insight or inspire another arm of the organization.
Do We Have the Right Data Management Strategy to Deliver Accurate Marketing Analytics?
If you have read this far into the article, you may be experiencing some challenges with your data management plan and/or your marketing analytics strategy. I have worked with organizations who have an overwhelming amount of data but are unable to translate it into an effective reporting structure all the way to organizations who don’t use a CRM program and therefore don’t think they have the necessary data to analyze and report effectively on marketing’s impact on the business goals. Regardless of your situation, start the process with a documented data management plan to help you identify data gaps or redundancies and gain agreement on the most reliable and relevant data sources to establish one version of the truth in your reporting. Your DMP will lay the foundation toward quickly building an effective and accurate marketing analytics strategy that will significantly improve marketing’s reputation within the organization.
Build a Data and Analytics Culture in the Marketing Department
Analytics and performance measurement can be a disruptor and strongly rejected in some cases, particularly in marketing departments that have most recently been reviewed on their creativity rather than measurable goals. Although confidence is improving somewhat, many CMO’s do not believe they have the right talent in place to fully leverage marketing analytics.
Modern marketers must be a rare combination of experienced creatives who crave access to data and are determined to deliver transparent, measurable results. Although the market is changing quickly this skill set can be difficult to find and in some cases, even more difficult to cultivate. Transparency in expectations and involving your team in building or adapting your existing data management and analytics strategies can help to increase team confidence and develop achievable metrics that model the right behaviors and provide tangible KPI’s to measure performance.
If you are struggling with your analytics strategy, don’t let the struggle keep you from starting. It is vitally important that marketers gain back the trust of their CEOs and transparently demonstrate their business acumen and talent for driving growth. Your strategy will evolve and improve over time but take a step in the right direction now to ensure your future stability and value.
Contact Surge Marketing Studio now to discover how simple and affordable we can make your Data Management or Marketing Analytics project.