by scott.gillum | Jul 12, 2012 | 2006, Marketing
Once upon a time there was a Prince named CMO and he lived in the magic kingdom of Marketing. The kingdom of Marketing was under attack from the kingdoms of Sales & Finance. The kingdoms were fighting over the “holy grail” of performance and ROI. So the Prince decided that he would build a Marketing Dashboard that would lead him to the Holy Grail.
The Prince commissioned a band of Knights called Consultants to lead the crusade and help him search the world for information. This journey was difficult and exhausted much of the Prince’s fortune but finally, the Knights built the Prince a magnificent and magical Dashboard…and the Prince was happy.
The Prince showed the Kingdoms of Sales & Finance his Dashboard and they were impressed. He told them that he was close to discovering where the Holy Gail of performance and ROI was hidden. Every month the Prince met with his people to talk about the Dashboard, and ogle at its magnificence but then, one day, something happened. The Dashboard started to lose its magic. The Prince and his people could not make it better and it steadily got worse; the Prince and the Kingdom of Marketing were very concerned and unhappy.
The Prince of Sales started to question the magnificence of the Dashboard and the power of Prince CMO. Prince Finance believed that the magic Dashboard was showing him how Prince CMO was squandering the wealth of his people. The Prince was under attack and eventually lost his kingdom.
The moral of the story is that a Dashboard is not the “holy grail” of performance and ROI. CMO’s are under a tremendous amount of pressure to show the organization how they are providing value and producing a positive return on what can be very sizeable investments (3-6% of revenues). CMO’s believe that they need to have the data to prove their case…and they are right. The difficult part is knowing what to do with the data once they have it, and how to move the numbers in the right direction. Although the story above is written as a fairy tale, it is based on a true story.
The most important thing that a CMO can do to improve the performance of marketing is teach/train country marketing managers the basics of pipeline management because it is their results that show up on the Dashboard. Effective pipeline management is built on four key principals:
- Volume – the flow of incoming response, leads, opportunity coming into the pipeline
- Conversion – the percent of opportunity that makes its way from one stage to another
- Cycle Time – the average time it takes for opportunity to move from one stage to the next
- Transaction Size – the average order size of the opportunity closed
If CMO’s can effectively coach their teams on how to manage by these prinicipals then they will have achieve the “Holy Grail”…and they will get to keep their kingdoms.
by scott.gillum | Jul 12, 2012 | 2006, Opinion
Original post date November 15, 2006
Over the last 25 years, I’ve had the opportunity to work with well over 100 companies. Some of them recognized as “best in class” while others brought up the rear…so to speak. What has been interesting is the consistent themes, trends, and/or characteristics that determine where they land on that list.
Below are what I’ve observed to be the “Top 10 Truisms” of business behavior.
The TOP 10
- Corporate Culture – is directly related to the CEO. He or she sets the tone that everyone else emulates.
- Trust – is the difference between a dysfunctional and a high performance team. If you can not trust the people you work with and/or who work for you, you can not perform at the highest level.
- 80/20 Rule – the Pareto Principal always, ALWAYS applies, whether it is revenue, profit, sales, people, etc.
- No New Customers – if you are an established company that has been in business for 10 years or more, you can achieve revenue and profit objectives solely based on doing a better job of capturing the opportunity in existing accounts (see the 80/20 rule).
- Marketing Contribution – 10-15% of Revenues– if you are in a mature marketplace and you have to use marketing to acquire new customers, sell new products, etc., know that it will not product more than 10-15% of your total revenues. The other 85-90% will come from the sales channels.
- The Rule of 70% – given the speed of today’s market, competitors, and customers, getting a product and/or marketing campaign/program 70% complete and out the door is good “enough.” Let customers/prospects complete the rest of the 30% for you. Less internal debate and more customer feedback makes for successful programs and products.
- NEW does not mean BETTER – everyone loves something new but it is the last thing that any company should focus on. Building/ selling/thinking NEW takes too long, cost too much and will have the lowest ROI. Focus first on getting more out of existing…and then invest in new (see 80/20 rule..again).
- Elephant in the Room syndrome – there are big problems impacting performance in every organization that everyone knows about but no one talks about or attempts to fix. They will treat the symptoms but not the core problem…call it career preservation. High performing companies (and leaders) create a culture that is open to addressing difficult issues.
- Risk Tolerance – fast growing and “best in class” companies have a culture of tolerating risk and/or failure. It is a HIGHLY valuable and a very real competitive advantage.
- Performance Dashboards – we recently completed a research study with the CMO Council that surveyed over 400 CMO’s in companies over $500 Million in revenue. 50% of the responders said that they have a Dashboard and 38% said that they were working on one. Here’s the truth…they don’t have a dashboard; they have an excel based “Report Card” of what they did, where they spent marketing dollars and what they got in return (hopefully). The reality is that a real Dashboard has real time information and can allow you to forecast at least 30 days forward. Don’t show everyone in the organization your “numbers” until you know how to move them in the right direction.
Since this posting, I’ve recognized two other “Truisms.”
- Sales Force Behavior – is consistent regardless of what they are selling, who they are selling it to, or the industry they work in. As a result, it’s somewhat easy to predict how they will react in certain situations and/or to certain changes or challenges. Good insight for marketers to know.
- Smart companies can’t tell you what they do – professional services firms are terrible at creating the “elevator” speech. The reason is that they view the company as a reflection of the work they do with clients. Each client and project being different, they form different opinions as to the organization’s value.
Please add your “Truism” in the comment section below.
