It is well-documented that CMOs now need to be revenue generators. Gone are days of being primarily measured on brand reach and field marketing events. The modern-day CMO works with the CRO in driving revenue and making the number.
However, in many respects, common knowledge ends here. Most CMOs today aren’t sure how much revenue they are supposed to drive, and where they expect that revenue to come from. They aren’t clear on what sales are responsible for vs. marketing. This leads to a general lack of clarity from the get-go; and as a result, CMOs exert a lot of effort in the wrong areas.
The CMOs who do have clarity driving revenue recognize there are three critical questions to answer. And that having those answers puts them in a situation to be on the front foot and proactive.
Three Critical Questions to Ask
Question #1: Does the CMO Fact Base Align with the CRO Fact Base?
Before the CMO and CRO decide who is responsible for what revenue, they must make sure they are working off of the same fact base. Without the same fact base, the CMO and CRO are not able to make decisions effectively related to resource allocation and properly plan where revenue will come from. With the same fact base however, the two can work in a cohesive and aligned manner.
CMOs and CROs can check whether they are aligned in this area by answering questions such as:
- Are sales and marketing aligned on which segments and customers drive the highest revenue today?
- Do sales and marketing have the same view of who is an ideal account, and who isn’t?
- Are sales and marketing building their fact base from the same data sources?
- Are sales and marketing aligned on where the greatest potential lies, by segment and individual customers?
It will quickly become apparent how similar, or disparate, the two fact bases are as you work through these questions.
Simply having the same fact base is not enough; there must be alignment on how success is measured and tracked.
Question #2: Are the CMO, CRO, and CEO Aligned on Key Metrics?
Following a common fact base, the CMO and CRO must align on the key revenue metrics. It’s also at this point that they need to involve another critical stakeholder – the CEO. Involving the CEO is imperative for creating a sense of accountability and clarity amongst the executive team.
With many potential revenue metrics to agree upon, the CMO and CRO must be particular about what they select. Three metrics is the optimal number for executives to choose as it is focused and not overwhelming. A structured decision process for choosing the key metrics is required so that both the CMO and CRO can articulate to their teams and others why they are focused on those items.
There is a litany of metrics to choose from. What matters just as much as selecting the metric is clearly defining what the metric is and how success will be measured. CMOs and CROs can’t go much further in the process without this.
Question #3: What Is the Success Criteria for Each Metric?
The last question to answer is “what constitutes success” for each metric. The success metric should be stated as an objective and have SMART (specific, measurable, achievable, relevant, time-bound) components.
Determining what success looks like ultimately needs to tie back to the revenue goals the CMO and CRO signed up for. And it should be done in a way which creates complete clarity on what needs to be achieved. This is also an opportunity for the CMO and CRO to determine what their operating rhythm will be throughout the year as it relates to reporting on their key metrics.
Having the right definitions for success, and the right infrastructure to report that success on is going to be critical.
Bringing It All Home
CMOs are better positioned now more than ever to be a revenue generator. They have an opportunity to work with other key executives in driving top-line and creating enterprise value for the company. To do so requires alignment with the CRO, clarity on what metrics will be measured, and knowing what success looks like for each. These achievable outcomes help set the foundation for CMOs to make their number.