As a marketing or communications professional, you create Business Value every day. By that, we mean that you materially contribute to real financial performance.
The problem is that you probably don’t know how you do that, exactly.
And guess what? Neither do your business leaders.
This challenge is not new. But in the minds of many business leaders, it has moved well beyond the dark jokes they used to tell each other about the famous John Wanamaker quote to a place of increasing frustration and even anger.
Even a simple Google search reveals that it’s a hot topic. Most famously, Fournaise published an oft-quoted survey of CxOs that asked more than 1,200 top business leaders why they have such a hard time trusting their marketing teams. (By the way, a great many CxOs conflate marketing and communications functionally as well as on an org chart, so there’s no cause for PR pros to rejoice here.)
The #1 takeaway in the Fournaise survey was that marketing (and communications) remains very distant from the financial realities of the business. More specifically, the problem is that marketing and communications rarely connect their spend or their outcomes to Business Value expressed in Dollars, Pounds, Euros, Yuan or Yen.
Several years ago, Mark Stouse (one of the authors of this post) was on stage at SxSW with W2O president Bob Pearson when Bob first made this comment: “You have to humanize before you monetize.” Most marketers and communicators in the audience focused on the “humanize” portion of what he said. But Bob clearly meant that monetization is explicitly understood to be the goal.
So, here’s a big question to consider: if you can’t monetize your reputation, your brand, your marketing and communications campaigns, then why would they be “Valuable” in a commercial sense?
For the past 7-8 years, we have run a private annual poll of Fortune 1000 business leaders to understand their beliefs, desires and frustrations concerning marketing and communications. The results reveal a rising intolerance of the status quo, and a drive to settle the issue of Business Value Creation.
In their responses, many business leaders reference the income statement, which delivers a cash-on-cash summary of performance. Everyone works to minimize expense and maximize revenue so that profits also are maximized. It’s the North Star of any business.
In stark contrast, the respondents often single out marketing and communications as organizations that defy this business standard, defining their success purely in terms of the volume of activities and outcomes that their budgets can afford. The result is an income statement view of marketing and communications that shows money out, but instead of money coming back in, there’s just a bunch of hits, clicks, leads, and other marketing KPIs that have no obvious tie to financial performance.
But let’s not forget the most important fact. As a marketer or communicator, you create Business Value every day. And at this point in reading our op-ed, you’re probably saying, “There’s got to be a way to show it!”
There is. But adopting it can require that you change your thinking dramatically.
1. Start with the financial goals set by the business. Revenue, margin and cash flow are the most important. Believe it or not, you can impact all three, and you can prove it if you know how. We’ve done it successfully in global companies, and you can too.
2. Understand the business drivers. Revenue, margin and cash flow are a function of several factors: demand generation, deal expansion, sales velocity and expense control. Again, you can materially impact all of these, but to do that you have to think like a businessperson first.
3. Refuse to be a "one-trick pony." You are doing a lot to create Business Value besides delivering awareness and lead generation at the top of the funnel. You have the opportunity to play a big role in mid- and late-stage deal impact, and chances are that you already are – you simply haven’t thought about it that way, and you haven’t pursued those outcomes. It’s time to change that.
4. Put yourself in the place of the customer. Regardless of their rhetoric, most marketing and communications teams have an “inside-out” mindset. If you want confirmation of that, just look at your 2016 planning process. Changing this POV is critical. The people you need to convince are outside your company, and those customers consume marketing and communications output differently for different reasons at different points in their decision path.
5. Understand your unique value proposition. This hasn’t changed because human nature hasn’t changed. Marketing and communications have a clear and unique value proposition around helping people to have awareness, confidence and trust in a person, product, idea or company. The result is that both professions can deliver pervasive, highly correlated changes in audience belief and behavior over time and at scale. No sales organization can do that alone.
6. Stop competing with sales for revenue credit. Even if you’re getting it, it’s important to know that your “revenue credit” is based on a negotiated understanding based on the idea of “touches” – like revenue sharing between product lines. Particularly in long-cycle B2B companies, revenue credit for marketing and communications is an arbitrary conclusion that can be changed at any time for any reason.
7. There’s nothing more strategic than helping people to agree. In the Business Value approach, marketing and communications exist to help companies and their customers do three things more effectively. From the business side, that is to sell, sell more, and sell faster. For the customer, it is about gaining the confidence to commit, commit more deeply, and commit sooner. This dynamic is pivotal for any organization whose financial performance is rooted in the confidence and trust of customers and many other stakeholders.
The Holmes Report has taken a very important step in creating the Business Value Creation category for this year’s In2 SABRE Awards. Even more impressively, a blue ribbon jury of global business leaders – two CEOs, a CFO, a General Counsel, a sales leader, and a Big Four partner – will be judging the entries.
When you look at the category questionnaire, you’re likely to feel your own sense of risk about responding. That’s natural and understandable. But while you may not have access to all the data you need, there are still a lot of dots you can connect.
In the end, this new category of Business Value Creation is nothing less than a gauntlet thrown down in front of our professions. It’s critically important that many of us be seen to snatch it from the floor and accept the challenge.
Mark Stouse is the founder and CEO of Proof, an enterprise software and consulting company created to help marketers and communicators deliver the proof of business value that business leaders demand.
Kyle Brantley is Vice President, Marketing Technology and Operations at BMC Software, a $2 billion global enterprise software company.
Joe Paluska is an independent consultant and a founding board member of Proof.
The Innovation SABRE Awards - North America 2017
Entries accepted through October 17 - don't miss out!