A talk entitled What the CEO Really Thinks of Marketing and the 5 Things You Can Do About It that I gave at the SVForum Marketing SIG on 7/11/11.

1. What the CEO Really Thinks of Marketing and 5 Things You Can Do About It Dave Kellogg www.kellblog.com

2. Intro and Disclaimers Intro Techie turned marketer Product marketing  VP marketing  CEO Ran marketing at BusinessObjects for 9 years during growth from $30M to $850M CEO of MarkLogic from $0 to $80M run-rate Disclaimer B2B background and bias During Q&A let’s see how we can apply these lessons to consumer-oriented businesses

3. Let’s Cut to the Chase What does the CEO really think of marketing?

4. or more specifically When most CEOs think marketing, they think this

5. John Wannamaker’s Famous Quote “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”

6. Scott McNealy At Sun’s Ten Year Anniversary Celebration Thanks to engineering for building our fine products Thanks to sales for selling our systems Thanks to customer support for servicing our customers Thanks to finance for accurately recording our profit and loss Thanks to facilities for maintaining our fine buildings Thanks to IT for running our internal systems Thanks to marketing for … whatever it is they do.

7. Business Objects GM Quote “Until I hired Charles, I must secretly admit that I never felt comfortable spending money on marketing.”

8. Why? Most CEOs do not understand marketing Few CEOs have worked in marketing Most come up through product or sales Marketing costs a lot of money Marketing spending is usually variable / discretionary cost … and easy to cut in a pinch Marketing delivers ambiguous returns Marketing agencies like bravado and the implication of voodoo and black magic (“marketing guru”) (We do it to ourselves)

9. Why? “If I hire an incremental salesperson, I get $1.7M. If I hire an incremental marketer, I get <what>?” I have a strong marketing background I have been a CMO for over a decade I believe in marketing I consider myself a marketing person I confess to having had this thought

10. The Even-Darker CEO Thought The board wants 6 more points of operating margin I wonder if I stopped marketing completely would anybody even notice?

11. What Can We Do About It? Remember why marketing exists Measure helpfulness Be metrics driven Be accountable Do periodic ROI work

12. 1. Why Does Marketing Exist? If we had a three-person company, what would we have? 1 founder 1 developer 1 salesperson “Code, sell, or get out of the way.”

13. Why Does Marketing Exist? Why might we add marketing Let’s not have every salesperson make his/her own slides Let’s be consistent in what we tell people Let’s generate leads for sales so they can focus on selling Someone needs to build the website Let’s capture that technical message in a white paper Let’s get the word out so sales isn’t calling on cold prospects … Marketing exists to makes sales easier

14. Make Sales Easier I first heard this as a product manager in 1987 from Chris Greendale (who went on to found CTG) I embraced it and used it as a mantra that drove my marketing career from product manager to CMO of a $1B company Its simplicity is disarming It does not imply that marketing is tactical and not strategic Designing products that sell more easily in is included Strategic acquisitions (e.g., of competitors) are included Use this as a North Star to orient your organization

15. 2. You Can Measure Helpfulness Periodic marketing internal satisfaction survey What tools have you used and to what extent are they useful? How is our marketing in an absolute sense? How is our marketing compared to other companies you’ve worked at? Please allocate 100 units of marketing resource to these categories of spend? What do you think of the website? What percent of your leads come from marketing? If you could change one thing in marketing, what would it be? Use the same research techniques on your internal customers as on your internal ones

16. The Ever-Popular People Quadrant % would want to take on salescall Best-kept secrets Superstars The pack Soon to be former employees % awareness

17. Get Respondee Demographics Have long have you worked at the company? How long have you worked in the industry? Did you make your quota last year? Enables slice-and-dice which can reveal very interesting patterns

18. The Helpfulness Key is Intelligent Debate Any idiot can show up and say “what do you want” and then do it A value-added marketer challenges sales during the conversation A “tough love” conversation I know you think you want that, but I think you don’t. Let me explain why. You are my customer, and I am not a doormat

19. 3. Be Metrics-Driven Could be a two-hour speech in itself Use systems like Salesforce for leads and opportunities and Eloqua or Marekto for incubation Report back on these metrics (e.g., at ops reviews) Do not gag your audience with data Show them data; talk about insight and action Our top 5 campaigns were … and we are going to … Our bottom 5 were … and we are going to … as a result

20. Easy Areas for Metrics Website Advertising / adwords Leads PR Salescalls Support calls Speeches Analyst meetings Trainings …

21. Take an Intelligent Approach to Metrics Don’t be a metrics slave Never do stupid things in the name of driving a metric Don’t incent your people blindly Thinks of metrics as a cockpit / dashboard Need to look at multiple panels to understand the situation Ask good questions that close loops Test your “knowledge” Do our A-scored leads actually convert at a better rate than the Bs? Hire a quant – if you’re not one, then get one

22. 4. Be Accountable One of the fundamental tensions between sales and marketing results from marketing’s perceived lack of accountability Sales feels (and usually is) highly accountable Marketing can be perceived as a country club One way to make yourself more accountable is to publish goals and do quarterly assessment (e.g. , at ops review) They will never see you as accountable as themselves, but they will appreciate the effort And it’s a best-practice anyway if only for alignment Wait a minute, you’re cancelling the XYZ! We love that!

23. 5. Do Periodic ROI Work Most B2B sales processes are complex and involve multiple touches to multiple individuals from an organization over the course of months and years Most ROI studies are not believed by the people who read them Either on a external or internal basis (Aside: prefer ROI tools to ROI calculations for external use) Ergo measuring ROI of B2B marketing is extremely difficult on a forward basis Which programs lead to which sales?

24. Do Periodic ROI Work I prefer to periodically run it on a backwards basis Which sales were influenced by which programs? Marketing-influenced pipeline Helps the organization understand the difficulty of the problem Do not count angels on pinheads e.g., use surrogates like credit the last program or the first contact or the first program, etc.

25. Summary Most CEOs don’t understand marketing All CEOs worry that marketing money is wasted Marketing money is usually variable and easy to cut Marketing can proactively protect itself from the “I wonder if we stopped doing this would anyone care” question that the CEO will occasionally consider Marketing can do this by Remembering why it exists Measuring helpfulness Being metrics-driven Being accountable Periodically doing ROI work