Esther Flammer, CMO, Wrike.
Organizations are approaching this year with an efficiency mindset, with all departments under pressure to do more impactful work with fewer resources and prove that any dollars spent are netting quick and meaningful results. Fortunately, marketing should already be built with that mentality—”prove it before you can spend it.” Great marketers have shown time and time again that you don’t have to overspend to grow. In fact, there are often more strategic ways to scale and deliver impact. This makes marketers well poised to set the tone for the larger organization through smarter, more savvy business practices.
One of the best ways to demonstrate this leadership is by identifying immediate indicators of ROI. By breaking campaigns down into shorter-term milestones—monthly vs. quarterly—marketers can gain real-time insight into how things are performing, test messages more quickly, and identify where changes need to be made. This kind of reactivity gives both teams and senior leadership the data they need to validate that any spend is delivering results, which may ultimately lead to increased investment in marketing.
At a baseline, anyone with a budget should have an eye on exactly what is being spent and what the company is getting out of that spend. Some organizations lose sight of this when markets are strong and marketing budgets are higher. Keeping this top of mind can lessen the impact of the economic roller coaster and create long-term stability across teams and finances. Where you land in times of cutback should really be your bottom line.
Quantifying Efficiency
Proving ROI is one of the best ways to show efficiency within your organization, but there are a few complementary metrics to consider, especially given that many facets of marketing rely on top-of-funnel or production metrics to demonstrate success.
Good marketers must be able to quantify efficiency in different ways, which means taking all investments into account and breaking down costs by campaign and channel, as well as total spend and cost per acquisition (CPA). This is not based on the acquisition of leads but on the sales revenue that marketing is generating in order to understand marketing effectiveness. CPA is one of the most important metrics marketers should be looking at this year, coupled with expected lifetime value (ELTV) to get a full view of the business value that marketing is driving. Being able to clearly communicate and demonstrate impact on marketing spend efficiency is top of mind for executive teams and key to solidifying marketing’s seat at the table.
There are three things marketers can do in the immediate terms to reduce their cost per acquisition:
• Get rid of the ‘use it or lose it’ mentality around budgets. This often causes teams to throw money at things that don’t provide guaranteed value in an attempt to allocate all of their budget by the end of the quarter or whatever their time constraint is. It can tank efficiency numbers and withdraw from the savvy marketing mentality I spoke about earlier.
• Take a closer look at your tech stack. Team leads should be conducting a regular audit of the tools they turn to on a daily basis—most marketers are using up to 15 apps daily—and know whether or not they are contributing to output.
• Review any channel that is not directly contributing to revenue. Understand how to better track attribution or influence, build a pilot to quickly optimize performance, or make hard decisions on where to make cuts.
The Productivity Problem
You can’t measure efficiency without considering the people’s side of the equation. Over the last few years, organizations, the media and even individual workers have had to take a hard look at productivity. The US Bureau of Labor reports a decline in 37 states last year. This problem can in large part be attributed to work management issues such as collaborating effectively in hybrid or remote work environments, difficulty setting boundaries between online and offline time, and the toll of economic instability.
The point of connectivity lies in the fact that despite productivity declines, the number of hours worked actually increased in 48 states. This speaks directly to our efficiency problem and the pain a lot of marketers are feeling from having to take on more work with fewer resources. The silver lining: Tackling one has the potential to greatly improve the other. By moving the efficiency needle—taking actionable steps to improve processes and infrastructure—leaders are more likely to rally support and urgency from the full marketing organization. From there, organizations can address productivity challenges. Here are a few things that have worked for my teams:
• Use a single source of truth. Many businesses introduced new digital tools to combat pandemic challenges, which we now know is decreasing visibility across departments. Marketing leaders must identify robust solutions that offer integrations with other day-to-day tools to ensure everyone is working from the same playbook.
• Prioritize work that is most impactful. The insight gained from the previous step helps to do this. The ability to visualize all work and identify initiatives with the greatest impact ensures time is being spent on the things that matter.
• Lean into AI. For the things that have to get done but may not be as closely tied to key initiatives, relying on AI to automate tasks for you is an effective way to keep things moving while creating more brain space for strategic thinking.
All Hands On Deck
Looking purely at job descriptions, you could argue that the CFO is largely responsible for driving efficiency. They have control of finances and are analyzing what they spend day in and day out. But I think that view is a bit shortsighted and takes away marketing’s potential to drive measurable business impact. If companies are truly determined to improve this metric, they must take an organizational approach. This means all teams must be marching toward the same goal, and the executive team needs to partner together to ensure efficiency is top of mind for their respective departments.
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