Be careful, marketers! Mike Sullivan won’t accept the excuse that you can’t measure marketing’s impact on the business. Sullivan, who is CFO for eIQnetworks Inc., an information security solution provider, has more than 20 years of financial and operational management expertise, primarily with enterprise software companies. He demands the numbers, but he also helps CMOs get them. We recently spoke to him about what he expects from his own CMO and what other CFOs can do to help their CMOs.
ITSMA: Mike, what should a CFO expect from a CMO in B2B?
Other than fantastic results (laughs)? No, seriously, I expect the CMO to develop a proven strategic plan that’s consistent with what the business is trying to do and with the sales model that we employ. I’ve been in a couple of organizations where the CMO designed strategies to go after customers that we shouldn’t have been going after. So they really have to be in tune with the company’s strategy, the products and services, and the customer profile that we are targeting. I also expect them to come up with the details on the messaging plan and brand awareness to make sure that our name is out there and visible.
ITSMA: Many say it’s difficult to measure marketing’s direct impact on revenue. What do you say to that?
Being a numbers guy, I think everything can be measured (laughs). But it’s not just what you measure; it’s how you interpret the numbers. We constantly battle about that here. For example, what is the definition of a lead? If you just measure the number of leads generated, you could say that 200 leads constitutes success. But what if those 200 leads turn out to all be garbage? If you’re going to look at the numbers and measure the results, you have to make sure that everyone understands what the numbers mean and what should define success.
From my perspective—and I know this is an idealistic thought—you should be able to get everything down to a formula-driven type of ROI. You have your forecasted sales, you know how much pipeline you need to generate, and you know the average deal size. Then you can turn around and calculate exactly how many qualified leads you need, how many opportunities you need, and so forth.
ITSMA: How can CFOs help CMOs?
CFOs can’t sit in an ivory tower and run results without talking to the marketing group. We don’t want to be the cops; I think if we’re collaborating with marketing and we all understand exactly what’s going on, then we can run the results and talk about them and analyze them. People may have different opinions, but in the end we’re at least having that conversation and we can talk about next steps and what we may do differently.
ITSMA: How often do you speak with your CMO?
I talk to my CMO multiple times a week, just to get an idea as to what’s going on, what issues he’s facing, and what marketing is seeing out there in the marketplace. Our CMO and I are both there when we do weekly sales calls. Then we also do some in-depth pipeline reviews and quarterly reviews. CMOs should always be involved in the sales discussion—understanding the business trends and what the reps are seeing in the field or the tele-reps are hearing on the phone.
ITSMA: A big change that we’re seeing in our research is a trend toward companies becoming more data driven. How are you dealing with that shift?
The problem with any system is garbage in, garbage out. If we identify the data and the metrics that we want to track, we’ve got to implement those processes using controls so that people are entering the data correctly. For example, within our Salesforce database, we want to understand how each pipeline contact came to be. So we have required fields where the rep has to identify how that lead was generated, whether it be a mass email, a trade show, a Webinar, or something else. And then we use analytics to understand at which point we hit someone and it really clicked in that person’s mind and got them to say, “I really want to move forward with eIQ.”
ITSMA: We all know that marketing is changing a lot lately. How much experimentation should CMOs be doing to try to improve results?
I don’t like to see a lot of experimentation. If you are managing your own money, typically you’ll put 75% to 80% of your funds into conservative, less risky investments and then put the rest into high-risk investments. I like to see my CMO and his or her team spend 80% of their budget money and time on programs that are proven to be successful and another 15% to 20% on programs that are new or trying something different to get the word out there.
Want to know what else is on the mind of your CFO? Check out the resources at CFO Magazine.