Do the CEO and the CMO know what to measure?

There was a great question posed to the CMO group on Linked In today:

“What are, in your opinion, the top five Marketing Key Performance Indicators, that a CEO should always pay attention to?”

For me, the premise of the question really asks a more fundamental question – do the CEO and CMO have agreement and shared vision on what the Marketing organization is set to achieve, and how it will be measured? In my experience, expectations are not set at all, leaving the CEO unsure where his investment dollars are going and the CMO unsure if he/she is delivering what the business truly needs.

When I meet with CEO’s and CMO’s, this is one of the first things I ask about – what are your specific goals and expectations for marketing this year? If they don’t know, then we really need to make sure we are clear on the true objective for the role of marketing in the organization and the expected outcomes (pure branding, sales support, lead generation, distribution and business development, and so on).  Based on the answer, I would start asking about the following (tailored to the type of business they are in – there is no one-size-fits-all formula here):

1) ROI as measured by revenue generated per marketing dollar spent, cost per sale/acquisition and the trend data behind both for the past 12 months.
2) Customer Loyalty measured on a few different levels (net promoters, retention/churn, repeat sales, and referrals)
3) Advertising/Marketing spend ratio between brand advertising, lead/sales generation advertising, customer retention.
4) Effectiveness of Public Relations / Media Relations
5) Competitive Landscape SWOT Analysis

Again, depending on the needs of the organization there are many other things to look at – it could be the effectiveness of internal communication of the brand messages, how the phones are answered, consistency in brand presentation, marketing team member retention and satisfaction. It all starts by knowing what your expectations are to begin with.

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