The credibility gap

The vast majority of CEOs believe marketers lack business credibility, that they’re not the business growth generators they should be, and they’re not focused enough on effectiveness, according to the findings of a recent report by Fournaise Marketing Group.

The company interviewed more than 600 large corporation and SMB CEOs and decision-makers in Europe, the US, Asia and Australia for the report.

Some 73pc of the CEOs interviewed said marketers lack business credibility and are unable to demonstrate how their cross-channel marketing strategies and campaigns help increase their organisations’ top line in terms of more customer demand, sales, prospects, conversions and market share. Seventy-seven percent said marketers talk about brand values, brand equity and similar parameters that top management find difficult to link back to revenue sales, EBIT and market valuation.

Other headline findings show that 74pc of CEOs believe marketers focus too much on the latest marketing trends like social media, but can rarely demonstrate how these can help generate more business for the company. And 73pc said that when marketers are asked to increase their marketing ROI, they tend to understand this as cost cutting through better economies of scale or negotiations with third party partners and agencies, instead of top-line growth generation.

Sixty-seven percent complained that, unlike CFOs and salesforces, marketers don’t think enough like businesspeople, and focus instead on the creative side of marketing, relying too much on their ad agencies to come up with the next big idea. Meanwhile, 72pc said that marketers are always asking for more money, but can rarely explain how much incremental business this money will generate. Seventy percent of CEOs said marketers bombard their stakeholders with marketing data that hardly relates to or means anything for their company’s P&L.
“Until marketers start speaking the P&L language of their CEOs and stakeholders, and until they start tracking the business effectiveness of their strategies and campaigns to prove they generate incremental customer demand, they will continue to lack credibility in the eyes of their CEOs and will continue to be seen more as a cost centre than as an asset,” explains Jerome Fontaine, CEO and chief tracker of Fournaise.

Worryingly, Fontaine says the disconnect between marketers and top management appears to be getting wider. Each year, as part of a global marketing effectiveness programme it runs, his company talks to C-suite executives to determine how closely aligned the marketing team and top management are.

“What we find year after year is that the disconnect between the CEOs and the marketers is actually getting wider and wider,” he says. “This year it’s 73pc. Last year it was 70pc and the year before it was in the area of 58pc.”

He agrees that this growing disconnect may be influenced by increasingly difficult business conditions.

“When it’s a tough economy, top management are even more focused on delivering results for their organisations. When things go well, you don’t really care what’s happening in your marketing or branding department, because sales are coming in. But when things are not going well you turn to the people who are supposed to generate revenue for the company and this is the marketing department on one side and the sales department on the other side.

“As things have not been going very well, CEOs are asking marketers what they’ve actually delivered with their budget. And marketers today are not able to tell them what they have been delivering, which is the big problem.”

Sales angle

According to Fontaine, there’s less of a disconnect between CEOs and the salesforce. “And that’s because CEOs know that salespeople are focusing on sales. You ask CEOs what the salesforce’s job is and they’ll say it’s to generate sales. And they’ll say the job of their marketing department is to generate growth and customer demand, so the salespeople can then tackle that customer demand. But the problem is that marketing people have not been able to demonstrate that they are generating that incremental customer demand.

“Marketers will always tell you that marketing ROI is at the top of their agenda. They have to say so because if they don’t, they will really look stupid. But, we have found that they cannot demonstrate the effectiveness of what they are doing, yet they always say that what they are doing is effective.

“The reason there is such a bad perception towards marketers is because in French we say ‘big mouth, but small actions’. That summarises the marketing industry. At top management, they are not interested in just talk; they are interested in actions, in results, in EBITDA (earnings before interest, taxes, depreciation and amortisation), revenue, gross profit. They are not interested in talking about whether Twitter is going to change the world of the company or not.”

To some extent, top management is responsible for the problem by not giving marketers very clear boundaries, he continues. “Marketers very often do not have very clear objectives of what they should be doing. But at the same time, it’s given knowledge that the job of marketing is to generate customer demand.

“But, at the same time, when you’re tasked to generate customer demand, you are supposed to put in place key performance indicators (KPIs) to demonstrate what that customer demand is for your organisation and how you deliver that.”

In Fontaine’s experience, the majority of marketers are unable to write a proper P&L. “And that’s one of the problems. You cannot implement a scientific model in marketing if you don’t have basic knowledge of them. 

“I always give the analogy to my clients that they are like surgeons: they are supposed to know the tools. And once they have that, they can explore their creativity.”

ROI marketers

However, he believes that around 20pc of marketers are focused on tracking results and demonstrating effectiveness. “ROI marketers understand that it’s not about marketing per se,” he explains.

“It’s about tracking everything in the marketing activities to deliver top-line results. It’s not about above-the-line versus below-the-line or about going after trends like social media just for the sake of it. It’s about putting in place a set of KPIs and going back to top management every quarter and saying, ‘This is the budget you gave me, this is what I have achieved in terms of customer demand with parameter one, two, three and four. This is what went well, this is what went wrong and this is what I’m doing about it’.

“ROI marketers are businesspeople in the area of marketing. And this is the kind of person CEOs are actually looking for because they speak CEO and CFO language.”

According to Fontaine, ROI marketers can usually be found in companies where there is pressure for sales and for revenue rather than the most successful companies.

“The really top companies are generally successful because they have a top CEO or a top management team who understands what marketing is all about and most of the time they do it themselves. They understand that they need super innovative products that will appeal to customers. They are not trying to win awards; they are not trying to tell stories that do not exist. They are just trying to deliver results, which means bottom line.

“When top management is under pressure, they need people below them – marketers – who will be able to handle pressure and demonstrate what they are achieving with the money. It’s a question of survival. You find a lot of ROI marketers in small and medium enterprises.”

He maintains that marketers have tended to be excluded from the boardroom because they’re not speaking the language of their management and stakeholders. “Look at top management in Fortune 500 companies; the vast majority come from finance and operations.

“Marketers will not be taken seriously until they start behaving like businesspeople, and until they start having KPIs that show how they are using the marketing money to deliver incremental results. If you want to be in the boardroom, you need to be ROI-driven,” Fontaine affirms.

This article first appeared in Irish Director magazine, Autumn 2011