What does it take to excel as a marketing leader? How do you build and manage a strategic marketing plan? Do you know if you’re properly calculating ROI? Peter Mahoney—the CEO and Founder of Plannuh—shares his perspective in this episode of The Content Callout. Don’t miss his unique insight into the world of marketing leadership.
Outline of This Episode
- [1:02] Peter’s three rapid-fire tips for marketing leaders
- [3:05] What it takes to become a good marketing leader
- [5:55] Why coaching is an important investment
- [6:55] The value of the Fractional CMO movement
- [8:45] Creating a strategic marketing plan
- [13:49] Calculating the ROI associated with marketing
- [19:28] Learn more about Peter’s book
What it takes to become a good marketing leader
People start their marketing careers in a specific domain. They may start as a content marketer, product marketer, demand generators, etc. When they shift into a marketing leadership role, they have to think like an executive.
An executive doesn’t think about the specific practices of their function. They think about the business impact that the function is going to make. They think in the context of the business. They make decisions that may deemphasize or de-invest marketing initiatives. Peter emphasizes that it’s essential to understand the impact of what you’re trying to do from a company-wide perspective.
Secondly, Peter encourages everyone to do this simple thing: define what success is. Write down key goals you’re trying to achieve. They should be well-formed, have understandable descriptions, and be controllable, measurable, and realistic. Then you can organize your plan around your goals.
Too many people start “doing” marketing without understanding the context of what they’re trying to achieve. As a marketing leader, you have to manage the business to success aligning with a plan that defines that success.
Creating a strategic and active marketing plan
You don’t just need a marketing plan. You need an active and agile plan. To accomplish that, you must build a business process around reviewing and adjusting your plan regularly. You should schedule meetings that include a regular review of your strategy, campaign performance, the market, and more. If you schedule these things deliberately, you’ll keep your plan alive.
Secondly, as you’re building a plan, start with the objectives you’re trying to achieve. What milestones are you trying to reach? If you want to generate $40 million of pipeline per year, should you generate $10 million by the end of quarter one? It’s important to understand where you’re going and then define the key waypoints. Then you must take stock of where you are against those waypoints and make adjustments. You need an overall plan built on goals, campaigns, and metrics that are routinely measured.
Peter believes in creating normalized measurements. You should be able to define a projected business value. What’s the conversion rate of leads into opportunities into the pipeline? What revenue can you expect? What marginal profit would you get? Creating definitions allows you to create a forecast.
You can see what you spend on leads and estimate what you expect them to convert to over time. Instead of measuring leads against revenue, you’re measuring the expected business outcome of one campaign versus another normalized to a marginal profit contribution. It helps you make smart decisions about optimizing a marketing plan.
Calculating the ROI associated with marketing
Most people are calculating ROI incorrectly. They say, “My return is my pipeline.” So if you get $1 million in the pipeline, is that the return you are looking for? No! You may only convert one-third of the pipeline at an 80% margin. That’s the actual business return that you’re getting.
People often think about the “I” as ad spend. Ad spend is useful data, but it’s incomplete. It’s only a portion of a campaign. You also have to factor in creative costs, production costs, and other expenses. What’s the total investment for the campaign? The marginal profit return divided by the total investment is your ROI.
The truth is that you’ll see a smaller number than you’re used to. But if you make a personal investment and you make a 2X return, it’s a great return on your investment.
Many people make the critical mistake that filling their pipeline is the end goal. But how much of your pipeline are you converting? What is your margin? Are you generating the return you need to? You need a good understanding of your business and what your marketing is doing to generate outcomes to properly calculate ROI.
Resources & People Mentioned
- Peter’s book: The Next CMO: A Guide to Operational Marketing Excellence
- Peter’s podcast: The Next CMO Podcast
- The Next CMO community