Accelerating Value
Accelerating Value

Episode · 11 months ago

CMOs: Here’s How You Marry Strategy & Ops

ABOUT THIS EPISODE

Stop trying to measure brands by the quarter.

Building a brand is squarely a long-term play. If you try to smash it into a short-term round hole, you can only see 10% of your efforts at best.

Without a complete picture, you’re abandoning your hard work before you ever know its true impact.

Marketers need to be business people first, with a layer of marketing on top.

So says Nick Robinson, Digital Demand Generation Director in SAP North America, who, having been on both sides of the fence, joins the show to discuss the intersection between strategy and operations.

In this episode, we discuss:

  • The trouble with brand attribution 
  • Linear vs exponential thinking 
  • The difficulty in making marketing predictions

Keep connected with Accelerating Value on Apple Podcasts, Spotify, or our website.

Listening on a desktop & can’t see the links? Just search for Accelerating Value in your favorite podcast player.

Today, every budget approval is an investment deal. If you're a marketer, sales or business leader, you had to promise to deliver value and impact. Writing the wave to get there is hard enough. Finding your way through the storm is even harder. If you're looking for that path forward so that you don't wipe out. You've come to the right place. Let's get into the show. Hi Everybody, this is marks Doucee, the host of accelerating value, your weekly podcast that looks at value creation the delivery of it. What does it take for you or your teens actually deliver value and be seen to deliver value? So we talked to all kinds of people about this subject. We talked to CEOS and CFOs and CMOS and a lot of other kinds of leaders, and then we talked to people who are further down in those organizations, because we find that that, you know, there's that old saying that says, Hey, where you sit termines where you stand on a whole bunch of things, and so the perspective on value that comes from somebody who's running an operation is going to be different, different than somebody at the very very top the to ultimately have to sink. But and that's what actually what we're going to talk about today with Nick Robinson, who leads North America demand generation for SAP. Nick is one of these guys that's fits. He he sits astride strategy and Oms. He's moving back and forth and back and forth between these two. So he's really very much in the cross hears of this whole topic. Nick, you know I've known each other for a long time. It's great to have you on the podcast. Yeah, thanks, marks for having me. Like I said, yeah, I've met about for or five years ago. At this point it's serious decisions and your messaging has been very consistent. It's resonated with me and I'm super excited that you started this podcast and you can further share your views, but also other people's views that meet yours, with the world and I'm super pumped to be on your podcast. Thank you very much. So let's get to the heart of the matter. This is the conversation that you and I have had sporadically over the last five years, where we've seen kind of a crisis situation building and building and building within marketing in general, but particularly within BTB marketing. The latest boat House survey data on CMO tenure and the sea sweet opinions of CMOS and Marketing in general is extremely problematic. It gets to the Delta that exists in the mind of this suite between the fact that they really believe that marketing to can deliver huge amounts of value and the fact that they don't see it happen and on top of that, fact that they their trust levels are exceptionally low. So where do we go from here? Like you have some great thoughts on this and so I'm just going to kind of let you rip here and occasionally I will I'll come in, but you know, I love your perspective. Yeah, I mean I we're CMOS are right now. I think is obviously problematic, given the data that you've provided, and where we go from here is based on really two factors. For me, actually started my career in BTC, so I know what types of tools, at least in the travel industry,...

...is where I came from. I know what types of tools our CMO at the time had in their tool belt versus what I see typically in Btb. And then also I'm taking part of my point of view on some of the changes that SAP is starting to make in and we have a new chief marketing and Solutions Officer and university or college, and it's kind of a from what I've seen ice. First, compare the BC side. So in travel, Ourcmo had access to product development, she had access to pricing. Of course promotion was a piece of her remit and also the the travel agency management. Those were all under her purview. So that's like partners product pricing plus promotion. And you think about what you were taught in for peas and so she had access to those tools in her tool belt. So when it came time to both invests and adjust tactics, she had way more tools in her tool belt, whereas it as opposed to what I see typically and BDB organizations is, and it's mainly a perception piece. And then, because CMOS have essentially taken jobs and they've been given those limited tools. So typically I see promotion, people typically think of a CMO and in a bdb organization is just a promotion vehicle, which people typically think of advertising as the only piece to brand. So that's like one thing I've seen. And then the second piece that leads me to believe that in order for CMOS to succeed in the futures that they're going to have to be able to make the business case to take on more of those tools in their tool belt. So they're going to have to help a business understand that they're going to work for. I would even advise them to make this pitch in their interview, is that they have to do the comparison between what the old CMO has, which is primarily promotion, and help the business understand the value that will be created if marketing decisions could be made based on product and pricing and promotions. So that's actually something that the new cumo of sap is doing right now. So in the past themos were responsible for brand and demand, which are really promotion vehicles. There it's just the promotion side. It's the execution side of marketing. But the new CMO is doing is she's taking in product management, she's taking in pricing, she's even responsible for industry value advisories, so a lot of the consulting that goes into value messaging and even working with customers and understanding customers. Of course she's taking the promotion side of it as well, and I think having all those pieces together will allow really the executive board to make better budget allocation decisions based on the unique markets and they unique solutions that that we have to meet those market needs. We ask you this, I mean because that's really interesting in it and it has some knock on kind of rampfications. Right. So, whether it's it's a good story or not, how does say, how does CMOS ability to achieve this kind of energy with is or her peers and sea sweet? How does that enable you to do your job better or not as well? Yeah, so I think if it's done right, obviously it starts with deep customer understanding and having a unique mix of those components across pricing,...

...across products, across promotion. So I sit in a place where I'm sitting in the promotion bucket. So what I'm doing is I'm working with the upstream activity from strategy, pricing and then product management, and I'm helping execute, you know, content channels, follow up activities, sales alignment, partner enablement, and so what it allows me to do is be more successful in meeting my targets because I already know that the strategy work has been done up front and it allows me to build a most per market segment and persona, because that deep level of strategy work has been done. With the tools that they have available in the arsenal, I can apply different treatments based on that work. So ultimately it'll allow me to hit my targets and help me meet my goals because I know that what I'm putting into market is highly differentiated and the investment levels are tuned based on the market maturity, the unique buyer personas, also putting content in the right places based on that research as well and knowing that the pricing model will be tuned to drive the right demand and that I know they'll be capacity on the other end to handle the demand on the sales and the partner and consulting side. In the past, which is really important, because I just described like the best case scenario in the past. What what? And I'm I'm dealing with this a little bit right now, but these plans we put into place really we're only talking about promotion. There wasn't a lot of differentiated planning and tuning with pricing, with product and we're in a situation right now with a specific portfolio where we put a bunch of programs in place. We did drive demand but on the other end we ended up seeing lower wind rates because pricing was out of whack compared to the market that we're going after and the actually go to market model didn't have the specialists that were consulting and selling that product. So you don't have to sneeze this and means correct so that that's some of the ramication of not having all the tools in the tool belt, because it leads to alignment issues, it leads to not being specific enough in the planning and then it also leads to wasted budget because you're you're not focused on the right market opportunities that will get value from your solution. So I have a I have a hypothesis here that I want to run past you. There's a lot of research out there, you know, not just on marketing but on human beings in general, that pretty conclusively shows that the ability of the unaided human brain to handle more than about three or four variables it after that it just breaks right. Yeah, I mean that's the the human brain has a lot of really amazing capacity and capability, but that's not part of it, right, and particularly when time lag is a major factor on those three or four or five or six factors. Right then it really shrim pretty fast. There's a lot of documentation, obviously, around all the changes, the speed of change, the velocity of change, of volatility of change, not only in society but in marketing, and the two re linked, right, because marketings all about people. So if society changes, marketing is going to feel that. So how do you how do you think about all this as a marketer, and where do you think this is all going? Because something is going to have to come in into...

...this equation that is very much like a GPS or North Star, or pick your metaphor right. It says, Hey, this is how we're going to keep track of all these variables and how they all kind of work together to either help or hurt us. Yeah, I think I am first on the three variable piece. The example that I always give to everyone is, if you know, I'm often the one that has to do chores around the house and when my wife gives me more than three things to do, I got to write it down in a list because there's no way. But I think I think we all get that one. I think that's necessarily gender specific either, but I think one gets that in general. Human Beings by nature are linear thinkers? No, naturally, it takes training and schooling to think. To think in the other camp, which is which is exponential, and the best, best business people and marketers make decisions that have exponential returns and it's very hard to make that case to another human being that you know by by evolution, think linearly. Human beings just don't naturally think that way. So if you're going to make an investment today and know that that's going to compound over the next two to three years, you have to be able to show the exponential math to prove that business case. And that's the biggest challenge today. And because we haven't had the technology we have, data is in a bunch of silos. We have marketers that have been trained. Marketers and to a certain extent, business people have been trained to prioritize investments where they have very clear inputs that have very clear outputs. So sales, for example, very clear inputs at count based we know the the output per salesperson, which is typically the way that we value whether sales is worth the investment or not, whereas marketing has exponential impact and the at least to date, there are certain pieces of the marketing mix that that have that short term, more linear impact, and then there are certain pieces that have the exponential impact. So because you have that mix of different mathematical models in BTB, and especially at my company, I see a lot of investments being made based on that linear impact because that's just what easiest to measure. Now, you know, one of the thing it's really interesting about that is, you know, if we kind of think about this in terms of the classic brand and demands, right, the main thing that has inhibited brand investment for years is the fact that almost all that is heavily time lag, right, and so if you if you say, well, I'm just going to measure the impact of my brand investment over the next quarter or maybe two quarters tops, right, you're actually only going to see about ten percent of the total value that you'll create from that investment over the next eighteen months or so. There's that really amazing arc of value that's created, whereas demand, right, is much more linear, right, but it's also far more perishable, right. So the half life of demand operations is very, very low. And so it is. It's...

...a it's a giant paradox that it all gets kind of lumped together. So how what are you guys doing right now the kind of better understand some of this, even even if it's just nascently. Yeah, so for about five years we've been doing marketing mix modeling and it's unusual for be tob enterprise me to be yes, Ly, the aligned more with big BBC, you know box companies, dbg, stuff like that. Right. Yeah, in fact I was surprised we weren't doing it when we when I when I first started at seep, because I had come from the BTC travel background. Where we're is marketing led. You know, if you look at the you look at the sales and marketing number in the business, it was well over fifty percent of that. It's, you know, marketing meet up ninety percent, which because so it allowed US big budget, allowed us to diversify that budget. But we had marketing mixed modeling to be able to predict and also assess and adjust, although it is manual, but but because we had a larger marketing budget, we could allocate a higher percentage of our marketing budget to that analytical piece. So I you know, fast forward to TESAP. We weren't doing it when I've we first, when I first started starting it, doing it about five years ago and so it's a twice a year exercise and it's rear view mirror. So we can we can tell which marketing and investments are showing us the highest return. What it doesn't tell us is what the time lag of those investments are. So invested dollar today one does its start kicking in, and then what's the full value realization of that investment? What it doesn't also do, besides time likes, it doesn't predict what what will be with that at least it can, but we don't use it that way. We don't use it to do prediction. We do the linear forecasting. Why would that be? I mean, if you kind of think about so, yeah, my hip offices is the the CMO and marketing in generals. Position in the corporate firmament would would change very, very rapidly if they started predicting and then showing that they were hitting those predictions. That would just immediately transform situation. But why are we not using the predictive too? Reasons number one, the the the the ability to operationalize the predictions into our systems of record and our and our regular executional workflows across marketing sales partner. It's in today's in today's environment, it's nearly impossible. You need to you need be able to connect the predictive data back into the systems where we're already doing the work, and systems often refers to technology. Technology is only a piece of it. You also have to infuse it into the mindsets and the work flows of the people do in the work and making the decisions to allocate the budget. That's number one. Number two is it's very manual today. It's not automated. So therefore, even if you could make the predictions, it's still disconnected. It's in a spreadsheet's in powerpoint and it's very hard to be able to scale that at to you know, let's just say they're about thirtyzero employees and the go to market, you know, organization one, five hundred marketers for just talking about marketing. That's a lot of people to be able to to scale...

...these these models out to. I think you have really put your finger on it, and not just for marketing, but you know, the the underlying math for marketing, mixed modeling is multi variable, linear and nonlinear regression, and we're talking about the same math that's used by scientists. Look at climate change, look at epid you know, emics and emics, all kinds of stuff. I mean basically, this is the math that's used to examine eighty to eighty five percent of the world's problems. Right. That's been one one way to say it. And what has always been problematic is the latency issue, right, which is your every six months kind of thing. And then you you're also got latency on top of that in terms of reporting. Right. So it takes a while to do the calculations because their manual for the most hard. Right. They involved a lot of human judgment and they then take a while for be reported and to be absorbed and understood into the organization. Usually by that time, whatever future advantage was identified has been lost because of the passage time. And so you're right. I mean, automation is as it has been in so many other areas of corporate endeavor. Right. Automation is is the thing, right, that pfix that. So what do you think you could do that you're not doing right now if you had current thing, you know, the current service that you have, that was automated, not maybe, I mean in relevant time whatever that I'm that latency is for you. Yeah, I think there are a couple things that I'd be able to do. Number One, I'm, prayer, primarily responsible for demand, but I know that brand is a huge driver of my my success, and so, because SEP has a portfolio products, I if I see and I can predict that there's a shortfall in you know, consideration here, that that the impacts demand here, which means we're not going to meet our revenue targets in two to three quarters, that I can actually make an adjustment in that particular portfolio or or I can suggest or we can work together with the brand team to make some some adjustments to their mix so that, you know, so that the programs that I'm running are positively impacted and therefore we can we can help the company meet their targets two to three quarters from now, for example, or even longer. The other piece is I work quite a bit under program so where we're doing pipeline acceleration, and I often see that we're at inadequately funded because of just because that's not typically something that's easily measurable, because there's a lot of variables once you get into pipeline and I'm sure this is the case for most BEB organizations. Once something gets into the pipeline, there's a lot of variables in the mix. That's where most of the focus is in the go to market team and so being able to tune the marketing investment, and maybe it's even the go to market investment, tuning the different pieces. They go into pipeline management. I think we'd be able to adjust in real time, which would ulst psimatinly allow us to increase our deal size. Are the amount of deals and that the velocity of it steals. When you, when you guys think about all this at sap, kind of think about more deals, bigger deals, faster deals. What's the hierarchy?...

It is, sap. And when you talk about and let me actually ask you a question, when you when you're talking about hierarchy, give me a couple of examples just to make sure I give you and your audios right now. Well, when I was CMO at honeywall eerospace, right, due to the nature of that business, everyone in that industry is already doing business with pretty much everybody else in that industry, right. So new opportunities in the classic sense of that meeting New logo opportunities don't aren't really the priority. And even top line right, and top line growth is always desirable and people strive for it and all that kind of stuff, right. But when I was there, in particular op income, which is margin and deal velocity improvements were is that that correlates directly to cash flow from revenue. So I think, you know, in my particular case it prove right. One of our board members of the former CFO of honeywell aerospace and I think that one of the reasons why he's on our board right is because of what he saw, you know, eight, nine years ago right there in terms of I mean what really forged our relationship as a CMO to cfo wasn't that the top line stuff. All of that was present, it was the fact that, against everybody's instincts, we show that we were able to increase average deeld velocity buy about five percent. So when you get many, many, many billions of dollars moving five percent faster through the company, that is smoking hot if you're the CFO. Yeah, so that is a that's an examp and and every company in every industry is different totally. They're going to stack right. Yeah, Boa, there's three. So okay, that's great. That's great information. So there's three categories that we think about. Number One, and by the way, sep is totally transforming into a cloud company. That's where most of the investment is focused and focus is going. And so the way that we think about future growth is in three categories. Number one, migrate from on Prem to cloud, number to, retension and expansion, and then number three, it's net new and you were recurring revenue and there are near to so they're like near term focus and then and then it shifts over the long term. And so right now most of the focus is on migration and retention. There's only a small set of the revenue that comes from expansion today, but we foresee that getting larger over time. And so are if you if you look at at migration and retention and a little expansion that say that's like sixty seventy percent today of where the focus is. And so if you think about the business value of migration and retention, I would put them into a similar category your that's already high margin business. So we're going to focus on making sure that we're building pipeline and and revenue and making sure that that's that continues to move faster, because that's already high margin to begin with. We already know that the deal size is almost fifty percent faster with those with with those two scenarios, and so from a marketing investment, that's where that's where most of the focus is going. And in fact we even look at it as as we look at company as as as an active dormant or net new,...

...and so the active endormant were we're focusing most of our attention on, because that's where that's you know, that's just focus on your customers and they'll they'll pay you back. In your define dormant as, they have a license but they're not really using it very much. Is that? Yes, exactly, or they haven't bought, you know, they haven't bought additional products in, you know, a year and a half, two years. We already know that they've had success in the past, or they're just not using the product and making sure that we make them successful. And so the marketing investment, in the messaging, pricing, the road map is all geared around those two segments, at least from the for the majority is like seventy percent thirty percent is all about, you know, getting in front of new audiences, building new pipeline and and closing new revenue. Now with that segment it's a little riskier because we don't have a relationship with these companies already. It's it's the the profit margins in the near term are lower or negative. You know, it's like typically one point five to two dollars per dollar, you know, in the first at least the first rev because they end up buying more in the future. It'll it'll take, you know, three to four years to get our investment back in those companies. The deal side, the deal cycles are slower and and you know they're typically smaller companies that there's a risk of them going out of business. But basically we think about the the deal cycles. There where marketing is going to be most of the investment that goes into the thirty percent and it's all about getting it's sourcing more deals, whereas the top two or more about pipeline acceleration. From what we've seen, because these companies, like you said, in the aerospace example, they already know us, they've have an account manager and it's all about making sure that they continue to see value and we continue to to educate them. And actually it's more about communicating that were less risky than other decisions that they could have made, like going with another competitor or even investing in an entirely new solution that's not earp or it's not hr software. You know that. That's also something that I see a lot of marketers miss and that, yeah, executives have many choices to solve problems. It's not just technology, it's also other things, and so we also have to communicate the value of making, you know, choices, whether it's technology or people, are training or processes. Don't you kind of bring this full circle, right? One of the things that has happened in marketing that I think we all, as marketers, were on a former marketer, right, love, right, is the explosion in lever that we have at our disposal. Right, more channels than ever before, right, all this kind of stuff. We can reach people in a far more targeted way than we ever could. Be for about it? A doubt, a doubt, right. But with with that comes all that complexity, and that's just within different parts of marketing. Right. The interaction between all of that and the rest of the business. Now you're talking about huge levels of complexity and this is now replicated, actually outside of marketing, in virtually every other function in the business. Right. So they're looking at from their point of view, the rest of the business. And how do we manage the same number of variables and how do we understand our time lag impact? And...

...in the case of marketing, right, we have this concept of lifetime value, which is my definition, a time lagged idea. So, when we think about all this together, where do you think emos really need to go? Like, we kind of screwed around on this now for the better part of fifteen years. Maybe twiny right. The feud between the business and marketing is it's a mean right, it's like a superman. It's particularly if you're on the business side. They all tell jokes to each other about marketing, right, yeah, and yet marketing is crucial. I mean it is the ultimate business performance multiplier, which is really how why it exists in it in the first place. Right. It was created a hundred plus years ago as a discipline to magnify what an individual sales guy or sales team was able to accomplish by themselves. Right. Where do we take this like. What do you what do you, you know, kind of think about Nick's big three recommendations right about what needs to happen? What are those? Yeah, it's I'm a big fan of Chris Walker. I think I've told you that at lunch and yeah, I mean the animal man. He's a monster, and I mean it starts with mindset and he had to be able to want to have the right mindset around marketing. And I listen to mark, of course. I've listened to mark quite a bit for the last five years, and it's in the mindset. Is Really about get a really deeply understand your customer first and foremost and and make sure that that's your North Star. It's really cliche to say that, but it makes a lot of difference in terms of being able to make the right decision. So happening the right yeah, never to be to be marketing team is close enough the customers to and add that understand. Not from my vanished point I mean there's actually some research that just pop yesterday on that. Right. They were talking about basically like stuff like personalization, all these different aspects of the customer experience and the mark getting self assessment versus the consumer assessment was wildly divergent and each one of these categories. Yeah, so sort of the what you're talking about her right. Yeah, I mean it the best way to describe it is there's an experience gap and so their marketers think that they understand the customer, but then if you ask the customers if the messaging that they're getting or the experiences that they're getting from them from marketing touches is relevant, I would imagine like marketers would be up here and, you know, customers would be down here, and it's because marketers have, I think, gotten to used to the promotion being in the Promotion Bucket, whereas they've they've missed the other pieces, which is deep qualitative customer research, that making sure they have the pricing right. And so it's, you know, if you're if you're a you're in marketing or CMO, you have to be able to educate your peers that these are particular marketing pieces. At most companies today, I would imagine that product management and pricing or handled by other teams. Sometimes they're not, but most from what I've heard and seen, that they are, and saying it's, you know, probably not going to happen on day one, if you have a negotiated that as...

...part of your interview process. But it would be really my advice to get really close with those teams and be able to partner with them and and make decisions together, because it that's a piece of the marketing mix. Some one know your customer, know your customer mindset. Number two is think about marketing, or broadly, which I think the best way to describe it, is that you got to be a businessperson first and then apply marketing options. And what that means is marketing is in just promotion. Marketing is is is other levers like I've been describing during the PODCAST, product road map, product management, pricing, promotion. Sometimes it's place depending on your your business model as well, and it's being able to apply the levers to based on the unique context of the market, but also based on what the customer is trying to solve and and the context of the customer. And when you're only in the Promotion Bucky, you have limited options and therefore that's why many CMOS and marketing orgs are they have limited capacity to to impact the trajectory of businesses. So it's being able to think like a businessperson and then provide options to the business on on what can be done to move these these business targets. And number three, it's being able to I mean the data piece is going to be a big part of it being able to achieve but number one and number two it's being at having the right data infrastructure and mindset around data to be able to communicate the the value and the achievement of the business targets based on those different levers. I just want to tell you there's a great book right here, Bill Schmarzo's book. He is the angelists around data and analytics at bill and a giant. He's known as the Dean a big data right, and one of the things that he says a lot, and it really kind of gets everybody in a rigor, but it's true, is that data by itself is a broken proms right, and what he means by that is is that data is like content without any context, and the analytics provide the context, right, and so it's the two together, right. Another you know we hear a lot about people make the comparison between data and oil. Right. Well, there's problems without analogy, but let's just go with the first thing, and if that's true, right. You have to put the oil into a refinery. You have to distill it it down into something that's usable, and that would be analytics. Yeah, no, I mean basically just going to recap. I mean it's it's it's the mindset, it's the thinking like a businessperson and offering marketing options, which basically a strategy, which, you've said, is really just a prediction. And then number three, it's having the infrastructure to be able to prove whether your prediction was correct. That's what I would do if some point I find myself in a CMOS seat. Thanks Nick. This is a great conversation. You know, a lot of times you know the people that we talked to or operating you know maybe one or two levels higher, and so they have a different view because their view of value and everything else is more abstract and and they don't ultimately, at the end of the day, I mean they're ultimately accountable or responsible for it, right, but they don't actually they're not doing the work to grind it out and make it happen. So to hear this from someone who is very much...

...accountable in that sense, it's just huge. Thank you so much. Yeah, of course it's always a pleasure to talk to you and thanks for having me on the program but we'll have you back. You've got a lot of great things to say. All right, guys, if you have any questions for Nick, this will be you can comment on the different platforms, but low this podcast. You can also this will be shared on Linkedin. You can comment there. You can also contact him directly through Linkedin. You can contact me directly through Linkedin. So there's lots and lots of ways kind of broaden this out and if we get enough questions right, that's what that turns into a new podcast. So if you liked hearing what nick had to say and be really surprised if we didn't, then you know one way to getting back is to ask you questions. Thanks, everybody. Will see you again next week. The sooner you can optimize your marketing spend, the quicker you can start delivering clear, measurable value to Your Business. That's exactly where business GPS from. Proof analytics can help. Learn more at proof analytics DOT AI. You've been listening to accelerating value, where raw conversations about the journey to business impact help you weather the storm ahead. To make sure you never miss an episode, subscribe to the show in your favorite podcast player. Until next time,.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (35)