CEOs today (rightfully) ask what marketing is doing to drive the business, but often get different variations of that story.
“If we’re not using those right metrics, we’re probably not getting the right story,” said Suzanne Reed, Head of Marketing, LBMC, who led the recent CMO Club Virtual Roundtable, The ABCs of KPIs for CEOs.
The roundtable addressed the need as well as strategies to determine a company’s KPIs for CEOs, and then how to establish dashboards or reports that help visualize their story.
“Marketing really has a lot of intelligence that a lot of people in the company need access and view into,” she said. “It’s not always just directly about driving the business, sometimes it’s about how you maintain the business in certain environments.”
Today, marketers have more information than ever but too much is not always good, Reed said. There’s a balance to having what you need in order to know you’re doing a good job, while at the same time being able to talk to CEOs and boards who may not understand all of the underlying data, nor should they be seeing all of the underlying data, she said.
“In our world, we can be a little like NASA and be central command,” Reed said. “We have all of it behind the scenes, but CEOs and boards don’t need to see it.”
Instead, CMOs can think about how best to educate their team, the different service lines, marketing functions, etc, around driving toward that top of the house insight dashboard.
She cited the auto industry as one such industry that has done this correctly.
“I bought a new car recently,” Reed said. “The auto industry has a much, much simpler dashboard – the car is going to tell me if I’m running out of gas, or it’s time for service…”
“I think about that from our world, that’s what the CEO and boards need to understand – what are the inflection points for the positives, or for when we have some issues.”
Since a CEO has limited time and bandwidth, only the bottom-line impacting metrics matter, Reed said.
A marketer’s job is:
- To educate the CEO on what they need to know, what is important, and how it relates to driving business.
- To know benchmarks.
- To have tried and true elements of an effective marketing plan with metrics.
“The CEO and top of the house are most interested in what are we doing to drive business – how much are we spending and what are we getting,” she said.
Reed shared some example dashboards, saying not any one will work for all of us, but all of them speak to what the CEO and boards are looking for. They want to know where you in your plan, how much are you spending, how are we doing on pace with our goals as a company, and what you think is driving each of these revenues.
“Have a few talking points behind it and be able to give an update on anything that your team is doing to contribute to the overall business objectives,” Reed said.
The biggest impact on the bottom line is what the CEO wants to hear, but there are some leading/lagging indicators they need visibility into as well, Reed said. This is the opportunity to talk about testing, trying new things, allocating funds to different channels, etc, she said.
In the end, dashboard and data consistency are key – be able to show the same metrics over time, rather than one-time data points.
“It’s important to have trending year over year, month over month, quarter over quarter – the time frames that are important in your business cycle that will enable people to see you’re on track, you’re better, or you’re below,” Reed said.
She called success in marketing a “symphony, not just a medley.”
“All of our marketing, operational teams and marketing metrics working together,” Reed said. “But at the end of the day, CEOs and boards are hearing a beautiful symphony, not seeing all of the underlying data – then they can focus on where we are in our results and what marketing is driving.”
Reed shared several steps for getting started with KPIs for CEOs:
- Build senior level consensus: What is important to your business?
- Socialize macro metrics – do so across the company.
- Identify strategic levers/business objectives. Audit and stratify available data.
- Ruthlessly edit – learn, change, and evaluate the result. “I don’t ever see marketing reporting and dashboards getting to a point where we are so static that we have the same report for more than 12 months,” Reed said. “The volume and business drivers require us to be a little more agile.”