The days when marketers only did the airy fairy part – like trips abroad to the photoshoot and being schmoozed by suppliers and agencies – appear on the way out, even by their own admission. In future, they will need to be much more familiar with financial data to survive, yet most concede they simply don’t know where to start.
This is one of the key findings in an in-depth report from profit optimisation experts Vendavo and academic Patrick Reinmoeller, Professor of Strategic Management at Cranfield School of Management, based on a poll of 200 chief marketing officers and chief financial officers from across Europe.
A growing number of business leaders expect the CMO to be able to affect an increase in margin, yet three in ten (29%) admit they would not even know where to look.
Nearly half (46%) of CMOs plan to align themselves more closely with the technology department as they look to boost profits, and 58% believe better – or more – access to tools would improve insight into margin performance.
Margin is, of course, inextricably linked to pricing specifics and deal sizes. Yet nearly half (46%) of the CMOs surveyed believe their sales teams still rely on gut feeling and six in ten (61%) believe they rely on personal relationships to agree the price of deals.
CMOs within organisations which are delivering relevant, up to the minute, pricing data into the hands of their sales teams are more likely to be performing ahead of market expectations than those that are not – nearly two thirds (63%) who use real-time data are performing ahead of market expectations.
“To prove their worth, CMOs must be able to show they can drive higher value sales and help the business to beat market expectations,” said Reinmoeller.
“They can do this with the right approach to cooperation and working closely with CFOs to pull margins up. The right tools are also important as they allow CMOs access to margin data on every sales deal, at the right time. Margins can now be governed to unprecedented levels, and those who take advantage of this will perform best in their roles.”
Reinmoeller proposes an Eight Actions Model, which the report outlines in detail, to help CMOs increase margin and perform ahead of market expectations:
1) Increase awareness of growth drivers
2) Focus on margin
3) Create a common ground
4) Analyse how to increase margin
5) Open the data vault
6) Offer data that matters
7) Help client facing employees exert better judgment
8) Ensure that awareness, analysis and action are linked
Vendavo Europe vice-president of business consulting Robert Irwin said: “CMOs are increasingly being held accountable for shareholder value. To demonstrate a correlation between their marketing strategy and the financial health of the organisation they need access to the right tools and insights. Greater collaboration with the finance and sales teams is also required to align activities and inform pricing decisions.”
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