How does a strategic marketing operations (MO) organization act within and across a company? The reality is that other stakeholders may be oblivious to the potential MO brings to the business. Old perceptions of what marketing is and what it can deliver act as highly effective blinders.
Breaking down these barriers begins with a new approach. As you transform the role of MO, you must also transform current relationships and perceptions of marketing. The move is a must for today’s strategic MO function. By doing so, MO can help reorient the company to see the real value that marketing can and should bring to the business.
Becoming a Revenue Partner with Sales
My doctoral dissertation research revealed strategies CMOs consider to be important in adopting financial accountability. Among all the strategies identified, the one that had the highest level of agreement among the CMOs in the study was achieving sales and marketing alignment. For marketing to be successful, they must have a peer- and revenue-oriented relationship with sales. To accomplish this, they must have a strategic MO organization.
Given this, it still baffles me why marketing has such a hard time understanding sales. The solution is quite simple: give them leads that convert to opportunities and closed business and give them real-time digital insights that better prepare them for conversations. Yet marketing continues to not address these needs. A hallmark of the strategic MO organization is how they create a joint revenue relationship with sales. Let’s see what that might look like and the role strategic MO plays.
Marketing is not the only culprit in blocking a new and better way to drive revenue. Sales is just as guilty. For the modern revenue machine to work, both sales and marketing need to make significant changes. By looking at how sales needs to change, marketing will be better informed on the actions they need to take to become partners in revenue. Let’s begin with an optimal view of what sales should be doing, outline what they are doing wrong, and bring it all together through market forces.
Imagine a sales process nearly devoid of guesswork: one where salespeople track what their prospects are researching—and thinking—without having a conversation or meeting. In this new world, cold calls have become obsolete. They have been replaced by technology that provides salespeople with a real-time view into the prospect’s digital body language. What if, at a critical point in the buyer’s evaluation, but before they engage with a competitor, an alert is sent to the salesperson’s inbox or phone telling them it’s time to engage?
The impact of digital transformation cannot be overstated, and a truly strategic MO group is able to leverage this to engineer a revenue management process that is repeatable, scalable, and predictable. This is the number one benefit that sales accrues from strategic MO.
Driving Business Results for the CEO
CEOs are uniquely responsible for driving shareholder value. Of course, there are other important initiatives, but this is the reason they are hired. As such, CEOs spend their days working to maximize every asset at their disposal to make better decisions for the company, resulting in improved shareholder value.
As these assets are evaluated, it isn’t uncommon to see marketing overlooked and certainly undervalued. CEOs may simply be unaware of what marketing has the capability of doing today. Traditional views or legacy thinking can create a perception that marketing is merely a money pit. A CEO might not understand that marketing is a critical lever that can be pulled to drive the business forward.
An example I’ve seen multiple times involves mergers and acquisitions. In these scenarios, I’ve seen marketing cut to the bone because there was no perceived business value. The powers that be were focused on the more traditional revenue-generating parts of the company and saw marketing as only an expense. They didn’t fully recognize the tools, technology, and data that marketing can bring to the table.
To reverse this thinking, a strategic MO function can work to inform a CEO about the opportunities at hand. To carry this out, we must focus upon the three challenges of the CMO: driving revenue, driving digital transformation, and being the customer expert. All of these are shareholder value-creating initiatives that can only succeed with a strategic MO group in place. Operationalizing strategies for the company is the core value of strategic MO. Delivering insights related to these objectives enables the CEO to view marketing as an important cog in the revenue-generating, digitally transforming, and customer-centric machine.
Demonstrating ROI for the CFO
In many companies, the relationship between the CMO and CFO narrows down to the annual budget brawl. The CMO asks for more money, and the CFO wants to know the return on investment (ROI) to expect from the funds. In the end, they reach a stalemate. For years, the CFO has been frustrated by the inability of marketing to show an ROI on any of the very substantial investments in marketing. In this scenario, the marketing budget is the bane of the CFO’s existence. The CFO views marketing as a pure cost center, and, as such, just tries to make sure marketing spend is kept within budget parameters.
The strategic MO organization is the solution to the CFO’s sleepless nights for two reasons. First, the strategic MO organization is frequently responsible for professionally managing the budgeting process and tracking for marketing. Second, they enable ROI and revenue contribution from marketing. A strategic MO organization provides marketing with professional project management skills, analytical skills, and dedication to the effort—and that’s a significant benefit. Working with the CFO to adopt their processes so everything can be expressed in CFO terms creates transparency. These steps foster a better working relationship with the CFO. After all, the closer the CFO is to understanding the business of marketing, the more credibility marketing will earn.
Elevating the CMO to the Corner Office
The value of MO to the CMO can be expressed in terms of the CMO’s current position—or it can be expressed in terms of their future job. As a result of strategic MO, the CMO can become a business leader, a customer expert and a digital transformation trailblazer. This connection can help marketing earn that sought-after seat at the table.
But it doesn’t end there. The attributes that help the CMO enter the boardroom can move the position even more. A board of directors will want a CEO of the future to have the skills the CMO develops through strategic MO. In other words, the CMO moves up to the board meeting—and then she runs it.
As MO continues to mature and focus on solving business problems, we will see more CMOs at the table representing all of marketing. We will also see more CMOs move to the corner office with a CEO sign on the door. And what happens to the open CMO spot? Well, it’s taken by the strategic MO leader.