What the CEO Really Thinks of Marketing

What the CEO Really Thinks of Marketing and 5 Things You Can Do About It

Dave Kellogg

www.kellblog.com

Intro and Disclaimers Intro

Techie turned marketer Product marketing VP marketing CEO Ran marketing at BusinessObjects for 9 years

during growth from $30M to $850M CEO of MarkLogic from $0 to $80M run-rate

Disclaimer B2B background and bias During Q&A let’s see how we can apply these

lessons to consumer-oriented businesses

Let’s Cut to the Chase

What does the CEO really think of marketing?

or more specifically

When most CEOs think marketing, they think this

John Wannamaker’s Famous Quote

“Half the money I spend on advertising is wasted; the trouble is I don't know which half.”

Scott McNealy At Sun’s Ten Year Anniversary Celebration Thanks to engineering for building our fine

products Thanks to sales for selling our systems Thanks to customer support for servicing our

customers Thanks to finance for accurately recording our

profit and loss Thanks to facilities for maintaining our fine

buildings Thanks to IT for running our internal systems

Thanks to marketing for … whatever it is they do.

Business Objects GM Quote

“Until I hired Charles, I must secretly admit that I never felt comfortable spending money on marketing.”

Why? Most CEOs do not understand marketing Few CEOs have worked in marketing

Most come up through product or sales Marketing costs a lot of money Marketing spending is usually variable /

discretionary cost … and easy to cut in a pinch Marketing delivers ambiguous returns Marketing agencies like bravado and the

implication of voodoo and black magic (“marketing guru”) (We do it to ourselves)

Why?

“If I hire an incremental salesperson, I get $1.7M. If I hire an incremental marketer, I get <what>?”

I have a strong marketing background I have been a CMO for over a decade I believe in marketing I consider myself a marketing person I confess to having had this thought

The Even-Darker CEO Thought

The board wants 6 more points of operating margin

I wonder if I stopped marketing completely would anybody even notice?

What Can We Do About It?1. Remember my marketing exists

2. Measure helpfulness

3. Be metrics driven

4. Be accountable

5. Do periodic ROI work

1. Why Does Marketing Exist?

If we had a three-person company, what would we have?

1 founder 1 developer 1 salesperson

“Code, sell, or get out of the way.”

Why Does Marketing Exist? Why might we add marketing

Let’s not have every salesperson make his/her own slides

Let’s be consistent in what we tell people Let’s generate leads for sales so they can focus on

selling Someone needs to build the website Let’s capture that technical message in a white

paper Let’s get the word out so sales isn’t calling on cold

prospects …

Marketing exists to makes sales easier

Make Sales Easier I first heard this a product manager in 1987

from Chris Greendale (who went out to found CTG)

I embraced it and used it as a mantra that drove my marketing career from product manager to CMO of a $1B company

Its simplicity is disarming It does not imply that marketing is tactical and

not strategic Designing products that sell more easily in is

included Strategic acquisitions (e.g., of competitors) are

included Use this as a North Star to orient your

organization

2. You Can Measure Helpfulness Periodic marketing internal satisfaction survey

What tools have you used and to what extent are they useful?

How is our marketing in an absolute sense? How is our marketing compared to other companies

you’ve worked at? Please allocate 100 units of marketing resource to these

categories of spend? What do you think of the website? What percent of your leads come from marketing? If you could change one thing in marketing, what would

it be? Use the same research techniques on your internal

customers as on your internal ones

The Ever-Popular People Quadrant

% awareness

% wouldwant to take on salescall Superstars

Best-kept secrets

The pack

Soon to be formeremployees

Get Respondee Demographics Have long have you worked at the company? How long have you worked in the industry? Did you make your quota last year?

Enables slice-and-dice which can reveal very interesting patterns

The Helpfulness Key is Intelligent Debate

Any idiot can show up and say “what do you want” and then do it

A value-added marketer challenges sales during the conversation

A “tough love” conversation I know you think you want that, but I think you

don’t. Let me explain why.

You are my customer, and I am not a doormat

3. Be Metrics-Driven Could be a two-hour speech in itself

Use systems like Salesforce for leads and opportunities and Eloqua or Marekto for incubation

Report back on these metrics (e.g., at ops reviews)

Do not gag your audience with data Show them data; talk about insight and action Our top 5 campaigns were … and we are going to … Our bottom 5 were … and we are going to … as a result

Easy Areas for Metrics Website Advertising / adwords Leads PR Salescalls Support calls Speeches Analyst meetings Trainings …

Take an Intelligent Approach to Metrics

Don’t be a metrics slave Never do stupid things in the name of driving a metric Don’t incent your people blindly

Thinks of metrics as a cockpit / dashboard Need to look at multiple panels to understand the situation

Ask good questions that close loops Test your “knowledge” Do our A-scored leads actually convert at a better rate than

the Bs?

Hire a quant – if you’re not one, then get one

4. Be Accountable One of the fundamental tensions between

sales and marketing results from marketing’s perceived lack of accountability

Sales feels (and usually is) highly accountable Marketing can be perceived as a country club One way to make yourself more accountable

is to publish goals and do quarterly assessment (e.g. , at ops review) They will never see you as accountable as

themselves, but they will appreciate the effort And it’s a best-practice anyway if only for

alignment Wait a minute, you’re cancelling the XYZ! We love

that!

5. Do Periodic ROI Work Most B2B sales processes are complex and involve

multiple touches to multiple individuals from an organization over the course of months and years

Most ROI studies are not believed by the people who read them Either on a external or internal basis (Aside: prefer ROI tools to ROI calculations for external

use)

Ergo measuring ROI of B2B marketing is extremely difficult on a forward basis Which programs lead to which sales?

Do Periodic ROI Work I prefer to periodically run it on a backwards

basis Which sales were influenced by which programs? Marketing-influenced pipeline

Helps the organization understand the difficulty of the problem

Do not count angels on pinheads e.g., use surrogates like credit the last program or

the first contact or the first program, etc.

Summary Most CEOs don’t understand marketing All CEOs worry that marketing money is wasted Marketing money is usually variable and easy to cut Marketing can proactively protect itself from the “I

wonder if we stopped doing this would anyone care” question that the CEO will occasionally consider

Marketing can do this by Remembering why it exists Measuring helpfulness Being metrics-driven Being accountable Periodically doing ROI work