Why Demonstrating Marketing ROI Is So Important for CMOs

When times are tough, costs must be cut and spending must be justified. Yet, outcomes must continue, business as usual. This conundrum puts CMOs between a rock and a hard place. How do you deliver results with a tighter budget? More importantly, how can you tie those results to your budget effectively?

The majority of CMOs are turning to a little metric called return on investment (ROI). As macroeconomic uncertainty results in tighter budgets, marketing spend is under more scrutiny than usual. Every dollar spent needs to be correlated with a healthy return, and fast — 77% of CMOs say they’re under pressure to prove increased short-term ROI on marketing campaigns.  

In this blog, we’ll break down why ROI matters right now, what a focus on ROI changes about marketing activity, and how to start delivering ROI despite the current economic climate. 

CMOs Must Track & Prove ROI Faster Than Ever

In the face of a looming recession following several years of pandemic-related upheaval, a laser focus on ROI is a pretty natural response for company leadership. After all, when so much is uncertain, doubling down on the things that are working is a no-brainer. 

This certainly seems to be the case. Nearly 37% of marketers report that tracking ROI is becoming increasingly front-and-center, especially for larger organizations. Indeed, ROI has risen to the top of company leaders’ priority list. 

Marketers report the top metrics for their CEO, CFO, and board members are:

  • ROI: 48.4%
  • Delivering business outcomes: 39.9%
  • New customer acquisition: 35.8%

Couple this with shifting customer behavior due to inflation, and it’s never been trickier for CMOs to deliver on leaderships’ expectations. As recent Gartner research has identified, the burden to deliver ROI falls heavily on the CMO’s shoulders. 

“In order to meet the enterprise mandate of driving growth amid continued disruption, CMOs must act decisively to prioritize their investments and their strategy for the year ahead [2023],” said Ewan McIntyre, Gartner Marketing’s Chief of Research.

The Impact of an ROI Focus on Marketing Objectives & Outcomes

Prioritizing ROI impacts CMOs’ decisions around marketing activity and outcomes in a variety of ways. Beyond the pressure to deliver ROI in the short term, the current environment has led marketing leaders to worry about their strategy as a whole. 31% of marketing leaders are concerned they’ll have to curb creative campaigns, with an additional 30% worrying they’ll have to operate more reactively instead of proactively. 

This new focus on tying marketing activity to clear-cut returns can be new territory for many marketing activities, presenting challenges for marketers and CMOs alike. For example, when analyzing marketing campaign effectiveness, only 28.4% of marketers report measuring ROI to do so. In fact, 45.7% of marketers say their brand is “too focused” on ROI. 

Clearly, there is a large disconnect between the metrics the CEO and CFO want to see and what marketers believe is important. In bridging that gap, CMOs have their jobs cut out for them. 

In today’s climate, an ROI focus means CMOs have to more or less accomplish all of the following:

  • Work smarter with a tighter budget in order to deliver the same outcomes as before.
  • Help the CEO and CFO understand what ROI means for marketing, and help marketers understand what ROI means according to the CEO and CFO.
  • Ensure a focus on ROI doesn’t distract from impactful marketing activities where ROI is difficult to measure, in both the short and long term.

In short, doing all this with fewer resources is a tall order for CMOs and the organizations they lead.

How To Retain Budget, Maximize Marketing Activity, & Prove ROI

One of the most important things CMOs can do to successfully lead their marketing organizations through uncertain times is learning how to strengthen value calculations that prove marketing’s importance. Although it may seem counterintuitive, this often means moving beyond ROI as an end-all metric and making the case to evaluate budgets on various other inputs instead. 

For example, the ROI of your marketing tech stack can be difficult to tie directly to pipeline numbers, yet it’s essential to marketing activities that do influence revenue. Likewise, long-term strategies may not have an immediate ROI, but they do pay off with time. Striking the right balance between what’s essential for both now and later can be difficult on your own.

Learn More About Inverta

Inverta acts as a player, coach, and trusted advisor when it comes to helping CMOs measure and deliver ROI. Our new campaign-in-a-box solution can build short-term wins while we set up your organization for future success. 

  • Interested in how Inverta can help coach you through a campaign planning strategy? Contact us here.
  • Learn more about our new campaign in a box solution – click here to access.

Check out Conquering Barriers to Activation: The Strategic Chief Marketing Technologist

 

 

A CMO’s Guide to Growing Revenue With Fewer Resources

Unfortunately, many CMOs are finding themselves on the frontlines of the much-discussed (and uneasily anticipated) economic headwinds of this year. Between employee layoffs and budget cuts in the face of increasing revenue targets, a perfect storm has landed right on the CMO’s doorstep.

If you’re a CMO, the question now remains: What marketing strategies will pave the way for success now and in the future?

To make your existing resources go further, find new growth opportunities amid shifting consumer expectations, and hit revenue targets, something needs to change. In this blog, we’ll break down the challenges CMOs are facing, what top CMOs are doing differently, and how you can think about growth in 2023’s unique market.

Challenges CMOs Are Facing in 2023

While budget inevitably does play a factor in marketing outcomes, strategic planning and execution become even more important during times of uncertainty. Indeed, the problem for many CMOs lies in their organizational processes, core skills, and implementation rather than their wallets.

Underused Tech

What good is adding a new martech tool to your belt if you don’t even use your old tools to their full capacity? (Asking for a friend…well, asking for a lot of friends, actually.) Accordingly to Gartner, marketers used just 42% of their martech stack overall in 2022—a decrease from 58% in 2020.

As more and more tools are emerging, it’s important to remember that your biggest source of untapped potential might be sitting right there in your URL bar. If you’re unsure where to start to get more bang for your buck, try auditing your existing tech stack.

Underdeveloped Skills & Support 

There’s a simple reason a greater portion of marketers might be underutilizing their tech stack: they don’t know how. A majority of martech leaders (64%) agree that their teams lack both the technical skills or support required to operate and increase the usage of their martech stack. Plus, as more marketing organizations are taking on the ownership of their tools, this presents a real challenge for internal teams. 

Couple this with the talent acquisition and retention issues of late (28% of martech leaders have difficulty identifying and recruiting martech talent), and CMOs have a real problem on their hands.

Where’s the ROI?

Finally, a pervasive problem facing CMOs this year is proving the ROI of their tools and processes. Gartner estimates that, despite marketing budgets allocating 31% of resources to marketing operations (MarOps), 72% of MarOps pursuits aren’t resulting in success.

If CMOs are going to be serious about growth during an era of budget squeeze, ironing out the challenges of ROI for the martech stack AND operations is key for success. 

The Solution: A Shifting CMO Role, New Focus, & Smart Growth

If anything, 2023 has demonstrated just how far the CMO role has changed in the last few years. Whereas success used to be more nebulous and targeted to a few small marketing areas of focus, today’s success is much more narrowly defined.

Jim D’Arcangleo, Chief Marketing & Growth Officer of AWeber, says the CMO role of today encompasses much more, including:

  • Utilizing dozens of channel options with dozens of media players
  • Owning GTM plans from end to end, including client engagement and upsell campaigns
  • Purchasing the right tech to enable the strategy
  • Ensuring the efficiency and effectiveness of all marketing activity with the data to prove it.

Where CMOs Should Focus Now

So, with all the changes, where is the best place to focus? Bryan Law, CMO at ZoomInfo, believes that it’s in creating a shift in focus from driving volume to driving value instead. That means aligning with sales across metrics, target accounts, campaigns, and outreach. 

How can CMOs do this?

  • Be consistent and distinctive in your marketing approach to capture mindshare.
  • Invest and leverage the right technologies that enable alignment and eliminate silos.

Short-Term Wins, Long-Term Focus

Ultimately, Lisa Ames, CMO at Norwest Venture Partners, gives a word of caution to CMOs making adjustments in 2023 to not get near-sighted. While a focus on ROI-driven performance with short-term demand gen is important, it should be balanced with a long-game effort to improve brand building and market trust. 

Between inflation and a recession, customers will be holding on to their wallets a bit more tightly, and brands who can build long-term value during this time of uncertainty will come out better for it in the end.

Final Takeaways: How Inverta Helps CMOs

At the end of the day, CMOs can jumpstart growth in 2023 if they make a few key adjustments to their strategy and teams today. That might look like jumpstarting your existing team by investing in skill development so your martech has additional use cases, doubling down on proving ROI in the areas where you know it works, or bringing on a marketing consultancy to fill in the gaps.

At Inverta, our team of seasoned marketers can help with everything from martech evaluation and implementation to resource augmentation

Learn More About Inverta

Webinar Recap: Tips for Marketers Leaders During Economic Uncertainty

It’s no secret that we’re in an economic downturn. Inflation hit a record high in June 2022 at 9.1%, and economic growth is slowing worldwide. 

As economic volatility continues, how can marketing leaders prepare for the headwinds to come? Inverta brought together four marketing leaders in a recent webinar to share their wisdom on the topic. The executive panel discussion included:

  • Kathy Macchi, VP of Innovation at Inverta
  • Deborah Wolf, CMO at Integrate
  • Jennifer Dimas, CMO at Telarus
  • Steve Hardy, CMO at Prophix
  • Allison Breeding, CMO at Apptio

In this blog we’ll recap how marketing leaders can refocus their priorities, address budget concerns, and follow best practices for times of economic uncertainty.  

Focus on Impact to Drive Results

Times of uncertainty are great opportunities to reassess your current approach to find out what’s moving the needle and what isn’t. For example, asking questions that refocus priorities on impact-driving areas can actually refine your focus and improve overall outcomes (rather than cutting off areas of impact due to limited resources). 

Answering the following questions can provide direction on where to focus:

  • What should I continue?
  • What should I stop?
  • What should continue to evolve?

When you double-click on every growth tactic to examine what’s working and what’s not, you’re free to focus on the activities that produce results. Imagine getting a 10% increase on each of those activities rather than implementing new strategies — that’s where the magic can happen, even in times of uncertainty.

After all, the needs of your customers haven’t disappeared. Your team’s goal should be to work horizontally in service of the buyer rather than vertically in service of each approach that reaches the buyer. Refining your messaging and prioritizing methods that share your messaging more efficiently is a great way to reach your customers, cut costs, and still hit growth goals.

Advocate for Your Budget By Proving Every Dollar

In times of volatility, sales cycles slow down and budget cuts seem almost inevitable. How can you ensure your team’s vital resources aren’t on the chopping block? By knowing your value.

Firstly, measure, measure, measure! Gone are the days when marketers had to estimate their value. In today’s climate, proving value for every dollar spent is a vital skill every marketing leader should develop.

Consider these tips when it comes to budgeting conversations and proving your value:

  • Show what outcomes every dollar invested can provide. Conversely, have honest dialogue about what results will NOT be provided with budget cuts.
  • Share your impact with the sales team and others so they can advocate for you. For example, if sales leaders understand how marketing budget impacts their goals, they’ll be more likely to defend what you both need to succeed.

4 Marketing Best Practices for Economic Uncertainty

Sometimes some sage words of wisdom can help steer you in the right direction. At the end of our webinar, we asked the four CMOs to impart their best advice for other marketing leaders going forward.

Consider these four takeaways:

  1. Be buyer-centric. B2B buyers are becoming more like B2C buyers every day. The ways they get information, interact with your brand, and want you to recognize who they are aligns with the path for B2C customers. Stay ultra-focused on the buyer beyond identifying personas. Talk to buyers and, most importantly, get your team attached to serving your buyer as part of a broader effort rather than an individual one.
  2. Focus on areas of impact. Marketing has so many opportunities to spread out, but don’t lose sight of what’s working. Do less of what isn’t important and more of what is going to make real change.
  3. Hone your value message. Continuously plan so that your message is received by the right audiences.
  4. Understand what works, and do more of it. Understand what doesn’t work, and do less of it. 

At Inverta, we help marketing leaders bridge the gap between strategy and activation. During times of economic volatility, having a partner in your corner who helps you bring down costs, go farther with your current efforts, and stay focused can unlock your marketing team’s potential. Learn more about how we help with strategy and planning here.