It is only relatively recently that marketers have been allowed anywhere near boardrooms. Not so long ago most board members tended to see marketers as maverick figures who did work that was all very interesting and creative, but had little to do with the serious business of company strategy and profit generation that took place in the boardroom.
The relationship between today’s marketing department and the board could not be more different. Marketing heads are increasingly pulled into the boardroom where they are expected to justify expenditure and advise on company direction. While some relish this increased scrutiny and enhanced responsibility, a sizeable proportion resist it. They see it as an unreasonable imposition on their time and autonomy.
Chris Halliburton, professor of international marketing at ESCP Europe Business School, believes it is time marketers began to focus more on their communication with the board. Marketing metrics have been insufficiently represented at board level for a number of reasons, he says. Board members tend to to be preoccupied with short term financial results rather than longer term brand equity. Also marketers often lack the ability to explain the relevance of marketing metrics.
Very often the problem is not that marketers are reluctant to share these metrics with the board; it is that they simply don’t have those metrics themselves. According to the 2009 Insight report produced by B2B Marketing and GyroHSR, only 53 per cent of B2B marketers have systems in place to measure campaigns, just 34 per cent can measure their direct response campaigns, and a paltry seven per cent measure their brand equity.
David Thorp, director of research and professional development at the Chartered Institute of Marketing, argues that by failing to measure their performance and to communicate their results to the board, marketers are not only running the risk of being exposed by increased scrutiny, they are also missing an opportunity to enhance the position of marketing.
Marketers want the backing of the board, he explains. But to get this they first have to win the board’s respect and this means demonstrating return on investment, and crucially talking in the same language as the board.
Thorp goes on to point out that too few marketers understand this language. He believes there is a significant training need for the marketing industry to address over the next few years. In the short term, though, here are five questions you should ask yourself about your communications with the board.
While many marketers fail to give enough information to the board, others provide too much. As Heather Westgate, chief executive at agency TDA, puts it, Their time is precious and bombarding them with irrelevant or mundane information could prevent them from valuing the really sparkling achievements. So, don’t circulate information just for the sake
of it.
Some say you should simply ask the board how much information they want and how frequently they want it. The problem with that approach is that you, not they, are the marketing experts. You should have a better idea of what they need to see in order to understand the company’s marketing work.
The exact content will depend very much on your sector, the size of your company, and recent events. However, Linda Miller, marketing capability director at consultant Brand Learning, offers this general advice on what information will be useful to most B2B boards: They need to see evidence that their investment in marketing is delivering on their business goals. By and large this is the topline figures. But they need more than just the numbers. They need your insight into what needs to be done differently to drive profitable growth.
She continues, So for B2B organisations this means customer acquisition, depth of usage, retention, churn, return of lapsed customers, satisfaction scores, and customer lifetime value estimates. These are all key predictors of sales and shareholder value. Also remember the 80/20 rule. There are probably a very small number of customers which represent the majority of your income. The board needs to know who these big customers are and the issues around them.
Selecting the right information is only half the battle. It is just as important to present it in the right way. Claire Nicholson, CEO at consultancy Adrenalin, offers this advice: Remember to speak in their language. Most board members aren’t going to be interested in the creative proposition or concept. They want confidence that your plan will deliver results which ultimately lead the company to a better financial position, improve its reputation and help to keep competitors at bay. So, don’t go into too much tactical detail, keep it topline.
She adds, How you present it in practical terms is also important. A Powerpoint measurement dashboard and one page of recommendations and priorities can work well. If PR is involved then a précis of positive and negative coverage is also highly useful.
Scott Knox, managing director of the Marketing Communication Consultants Association, believes that marketers should seek help in communicating with the board. He explains, Traditionally marketers have struggled to talk hard facts. They should approach other departments such as procurement, finance and research to ask how they report to the board. If they don’t do this the temptation is there to ‘bluff it’.
Many marketers find it very useful to involve the sales team in this process. Bob Apollo, managing director at Inflexion-Point Strategy Partners, says, I strongly recommend that marketing and sales share the same metrics. Marketing should be concerned not only about the numbers of leads, but also the number and value of sales attributable to different campaigns. This should be reflected in the information you present to the board.
While this communication with the board is important you need to be careful not to spend so much time reporting progress that you have little time left to actually make any progress. So, you might want to look into automating elements of the reporting process.
Ian Liddicoat, managing director of EMB Marketing Sciences, says, There are a myriad of reporting tools that can help, from enterprise level solutions such as SAS Balanced Scorecard, Alterian Analytical Dashboard or Microsoft tools such as SQL reporting, all the way down to simple Excel-based reporting.
As with all automation you should tread carefully. Ensure that efficiency does not come at the price of effectiveness. Frequently review your reporting processes, and remember to provide insightful narrative analysis alongside the raw figures.
There is much to get right when it comes to reporting to the board, so it is worth spending time and energy on it. As the gloom of recession remains firmly settled over the UK economy, boards are becoming ever more demanding of marketers. They want to know what results they are achieving from their investments. Above and beyond this, however, it is firmly in the interests of marketers to develop strong lines of communication with the board.
As Knox concludes, There is extra pressure at the moment due to the financial climate but the lessons learnt about reporting at the moment shouldn’t be forgotten when the markets recover. You often hear people working in marketing complain that not enough marketers make it onto the board. This will only change when marketers learn to communicate with the board, and those who do this most successfully will be the ones who in the coming years find themselves joining those boards.
