By Peter Tait, VP of Marketing, Radius
CMOs are busy tinkering with their marketing budgets. With this comes the responsibility of choosing from countless technologies promising to improve efficiency, ROI, and conversions. How can marketers leverage data to inform financial decisions?
According to Gartner analyst Laura McLellan, the top three challenges marketers face are growing profitable revenue, connecting more effectively with customers, and standing out amidst serious competition. What amount should CEOs be doling out to overcome these hurdles?
The CMO Council advises spending 1% to 10% of sales revenue on marketing per year. The budget can then be broken down by the 70/20/10 rule. This dictates that you allocate 70% of the budget to tried and true channels, 20% to safe bets, and 10% to experimental opportunities that may provide a big payoff.
While these numbers have proven to be effective, they don’t take into account the fact that marketing has evolved. Now more than ever, marketers are being held accountable to report detailed metrics at every stage of the funnel and how much revenue can be attributed directly to their efforts. Forrester predicts that in 2015, CMOs will be responsible for turning the enterprise toward the customer, evolving their role into the engine that fuels customer-centric company growth. CMOs will also take on a more significant role in the C-suite and partner with CIOs to solve data challenges. This will require them to pick and choose from a plethora oftechnologies becoming readily available to marketers. How do executives make sound investments that increase ROI?
Data eases the burden by providing marketers the opportunity to analyze the effectiveness of every single campaign. Rather than scouring through this data at the end of the fiscal year, CMOs should instead leverage these insights on a daily basis to inform spending decisions in the future.
“Marketers who incorporate return-on-investment data into their daily decision making can better allocate their marketing dollars,” according to Mckinsey & Company.
Make campaign data and analytics a part of the conversation on a weekly basis. Have employees measure accurate data and present their findings. This not only encourages your marketing team to invest in technologies that show their worth in dollars, but also builds a data-driven marketing culture, in which employees set numerical goals.
Spend some time conducting an internal audit of the current marketing technologies you already have in-house. How are they contributing to ROI and are they quantifiable? Understand what’s missing and what can be eliminated. Real-time updates provide CMOs with a wealth of knowledge and allow them to redirect funds to successful channels.
A robust marketing budget is one that requires maintenance, with frequent adjustments. By adding data to the decision making process, CMOs can avoid becoming risk managers and focus more of their time leading capable marketing teams.
Peter Tait is VP of Marketing for Radius, a B2B marketing intelligence company. Tait is a marketing technologist who builds revenue-generating machines. He has built data-driven marketing teams at firms ranging from open source startups to tech giants such as BEA, EMC and Citrix.