In many organizations, the marketing function is still viewed as a cost center instead of a revenue driver. Part of the reason is inertial, formed from years when top marketing executives ran departments instead of taking responsibility for their businesses.
But these days, plenty of CMOs say that thinking and acting like a business leader is the single most important driver for their success. Key to this approach is a focus on business results.
My Chief Outsiders colleague Jon Rice has seen plenty of change in this area over a 30-year marketing career that has focused primarily on restaurants and franchise systems in the hospitality industry. He said,
In the old days, it was adequate just to have a media plan and promote a brand to drive awareness. But as the marketplace evolved and the media channels changed, things became more competitive. Today, the dynamics of understanding business results and having appropriate measures and monitors in place is far more sophisticated."
Key Performance Indicators
Rice said in the restaurant space, the key metrics are indicators of guest engagement. "It's the notion that we want to build our loyal fan base, and we need to really throw our arms around this key group of guests who we're really dependent upon," he noted.
"Frequency, loyalty and various other measures not tied directly to top line sales have become important measures for understanding whether or not you are engaging with your specific target market," Rice said. The problem, he noted, isn't the lack of data, rather the volume of it. "The depth of it is so intense, you can get lost in it. You really need to know what data to focus on and then monitor it closely."
"At the end of the day," Rice added, "it's about influencing behavior and getting people to interact with your brand and your business in a way that's beneficial and hopefully profitable. The marketer has to connect those dots between the data, the business results, and the preferences and the desires of the customer."
Focus on Measurable Results
So how can marketers be sure they know which of their efforts is driving results? Rice said,
Ideally, you have some element of online interaction. As you change variables in your marketing efforts over time, you can at least monitor and measure which of those caused additional data capture and hopefully some form of transaction -- if you do business online. If nothing else, you know the raw traffic to your website and can correlate it with changes in traffic at brick and mortar locations."
To be considered a leader in a business, an executive has to take responsibility for the overall results. But CMOs must earn their seat at the revenue table alongside the other C-level executives and board members. No doubt many CEOs would agree.