As reported in the Harvard Business Review, CMOs face a tough battle in today’s business environment. In fact, a global survey by the Fournaise Marketing Group revealed that 80% of CEOs don’t trust or are unimpressed with their CMOs. In HBR’s own surveys, 74% of CMOs say they believe their jobs don’t allow them to maximize their impact on the business. Clearly, aligning marketing to business strategy could empower CMOs to be more effective and gain the respect of the executive team. A system of record (SoR) can help make this happen by aligning and strengthening metrics for key performance indicators (KPIs) across departments.
What are the right KPIs?
Determining the right set of KPIs to align with larger corporate objectives can be challenging. Many marketers still rely too much on the number of clicks, shares, likes, tweets, or pins they’ve delivered, which is often of very little interest to anyone outside of the marketing department. For example, if you’re talking to sales, you look at actual sales numbers, customer acquisitions, and revenue lift. Finance looks at net revenue, cost of goods sold (COGS), or profit margins. All of these make sense to the other executives because they have a direct relationship with the bottom line. The number of retweets do not.
So how can marketing choose the right KPIs? First, marketing leaders need to step back and ask, “What impactful, meaningful KPIs directly aligned with the corporate strategy that we are not currently measuring?” This requires gathering information from all areas and taking a bird’s eye view of your organization as a whole and tracing those KPIs back to ROI, ROAS, or some other financial measure that is tangible. (CMOs may want to partner with CFOs to achieve the correct KPIs.)
Second, once the entire organization’s goals have been established, marketing organizations can tie their KPIs to explicit goals they want to hit and establish a cadence that makes sense for everyone, such as quarterly milestones (if not already in place). At every quarter’s end, CMOs assess whether they are on track, or if they will have to work harder the next quarter to make up for any shortfalls. (A System of Record can help you assess goals more frequently, which we’ll go into later. Quarterly goals, however, are a good place to start.)
You know your key KPIs—but how can you collect and consolidate multiple channels
Even if you are a master marketer and have chosen the perfect set of KPIs that resonate with the executive team, there is another challenge on the horizon. Strategies often stretch across multiple channels, and marketing leaders have to surmount the difficult task of collecting and aggregating data for cross-channel KPIs. If the task of manually calculating KPIs is too onerous, most organizations will not be able to calculate very frequently. For example, if the marketing department’s milestones are set every quarter, then manual calculation will result in only end-of-quarter KPI calculation. There is another option.
How a marketing System of Record aligns your KPIs
Infrequent updates of departmental KPIs severely impedes the marketing team’s ability to optimize their efforts on an ongoing basis. This is where an omni-channel marketing System of Record (SoR) helps. Channel data is automatically collected, cleansed, and aggregated within the SoR. Various dashboards are set up to track the department’s omni-channel KPIs quickly, equitably, and reliably. So when the CEO calls, it should be pretty easy to pull your KPIs and the underlying factors driving them. Custom Report Builders and visual analytics tools are needed to maximize the benefit of an SoR for marketing. Setting up a dashboard eliminates the repetitive nature of manually calculating and visualizing KPIs over time.
When KPIs are readily available, CMOs can continuously track their department’s progress and pacing for the quarter. By setting the right goals and leveraging the marketing SoR to automatically calculate KPIs and track ongoing marketing goals, CMOs can provide timely and relevant data that resonates with the rest of the executive team. The direct line between marketing initiatives and company vision will be far clearer to all executive leaders involved, including the CEO and the CFO.
Think about relevant departmental KPIs that would resonate with the larger executive team, and set them up on top of your marketing SoR. Monitor them continuously so that you understand your pacing for the quarter and watch all departments achieve more success.
Aligning marketing strategy to overall corporate strategy doesn’t have to be burdensome—a marketing system of record can help you align and automate this important step toward your organization’s prosperity and lead you to “hero” status. For more insights into how a system of record or SoR improves your marketing, download our eBook, Four Ways You Win with a Marketing System of Record.