Emily Tan
Jul 11, 2012

CEOs to marketers: Get out of 'la-la land' and prove ROI

GLOBAL - By and large, marketers are failing to gain the trust of 80 per cent of CEOs surveyed by research firm Fournaise in its 2012 Global Marketing Effectiveness Programme.

To build trust marketers need to speak the language of ROI
To build trust marketers need to speak the language of ROI

The study interviewed more than 1,200 large corporation and SMB CEOs and decision-makers in North America, Europe, Asia and Australia, finding that most CEOs don't trust and are not very impressed by the work done by marketers. In comparison, 90 per cent of the same CEOs trust and value the opinions and work of their CFOs and CIOs. 

The reasons, according to Fournaise: CEOs believe marketers to be too disconnected from short-, medium- and long-term financial reality. Nearly 80 per cent of CEOs are convinced that marketers too often lose sight of their real job: generating more customer demand in a measurable way. 

“People trust doctors, surgeons, lawyers, pilots or accountants simply because they know these no-nonsense professionals are trained to focus on the right set of data to take the best decisions and achieve the best outcomes possible, and CEOs trust CFOs and CIOs for the same reasons," commented Jerome Fontaine, CEO and chief tracker for Fournaise. 

The game, added Fontaine, wasn't about data, but about "right and relevant" data for the right purpose and the right decision-making with no "fluff around". 

For B2C CEOs, more customer-demand means more sales revenue. Unfortunately, nearly seven in 10 of B2C CEOs believe their marketers now live too much in a creative and social-media bubble and focus too much on parameters such as 'likes', 'tweets', 'feeds' or 'followers'—parameters they can't prove generate more business-quantifiable customer demand for products and services. CEOs regard these parameters as "interesting but not critical". 

For B2B CEOs, more customer demand equates to more qualified or sales-ready prospects in the sales pipeline. More than 70 per cent of these CEOs believe that their marketers are focused on the latest marketing technologies but are failing to deliver the level of incremental customer demand expected of them. 

These CEOs feel marketers are too distracted, get sucked into the the "technological flurry and jargon" related to system integration and forget that technology is meant to be used only as a support tool. These tools don't create demand per se; only accurate strategies and campaigns pushing the right products, product benefits, content and customer value propositions do.

The report also found that CEOs believe B2B and prospect-driven marketers desperate to prove their worth mistakenly focus on performance indicators that are actually not theirs, such as prospect conversions and revenue. CEOs believe that marketers have lost sight that these indicators are sales-force related. Instead, marketers should focus on the customer-demand related indicators, which are directly linked to their job and over which they have control. 

So how can marketers earn back the trust of their CEOs? Three-quarters of CEOs surveyed think marketers misunderstand and misuse the 'real business' definitions of the words 'results', 'ROI' and 'performance' and thus fail to speak the language of top management. Marketers should zoom in on a few critical key business performance indicators to precisely measure, quantify and report on the level of customer demand they are delivering, according to the study.

To earn the CEO's trust and prove that they are solid business generators, 74 per cent of CEOs want marketers to be completely ROI focused.

B2C CEOs want these ROI marketers to be focused on tracking, reporting and boosting four key marketing performance indicators: sell-in, sell-out, market share and marketing ROI (defined as the correlation between marketing spending and the gross profit generated from it). 

Meanwhile 85 per cent of B2B CEOs (and B2C CEOs in prospect-driven industries) would like ROI marketers to focus on tracking, reporting and boosting prospect volume, prospect quality rate, marketing effectiveness rate (defined as the percentage of marketing spending that directly generated prospects) and the business potential generated by marketing. 

“Marketers will have to understand that they need to start “cutting the rubbish” if they are to earn the trust of CEOs and if they want to have a bigger impact in the boardroom," explained Fontaine. “They will have to transform themselves into true business-driven ROI marketers or forever remain in what 65 per cent of CEOs told us they call marketing la-la land."

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