Focus ROI on Financial and Strategic Outcomes

If marketing is to be valued as a core business investment, then the chief marketing officer must instill a rigorous, results-oriented discipline to set quantifiable goals and demonstrate ROI. Too often, marketing goals are either missing in action or stated in terms too ‘soft’ to get the CFO’s endorsement. Performance measurements are often activity or process oriented, which while important for managing an efficient marketing operation, don’t always link expenditures to business outcomes.

The bottom line is this: in the C-suite, only two sets of metrics count — results related to financial performance and results related to strategic performance. Revenue. Volume growth. Market share. Profitability. Brand loyalty. Differentiation. Competitive sustainability.

We all know the challenges faced by healthcare CMOs when it comes to ROI — information systems that aren’t oriented to customer transactions or purchasing patterns, extensive variations in pricing and reimbursement, complex channel relationships, long buying cycles, etc. — but, in my experience, the quest for the holy grail of marketing ROI is derailed at three key junctures.

1. Production of marketing plans that are really tactical ‘to do’ lists confined to marketing department activities

Many a marketing effort falters because actions are created and dollars expended without the strategic underpinning that aligns the organization’s growth goals with market opportunities. This happens when marketing is disconnected from growth discussions, then called in after the fact to put a communications spin on the decision-making.

A strategic marketing plan is a derivative of the company’s strategic plan — addressing how the health system intends to grow, what markets it will serve and with what products and services, how it will create differentiation and sources of competitive advantage, how brands will be positioned, how the portfolio will be configured to optimize profitability, how marketing investments will be prioritized, what the expectations are for returns.

2. Marketing investments that overly-emphasize promotions as the primary customer acquisition strategy

At a recent gathering of healthcare marketing executives, the CMO for a well-known, national electronics retailer shared the business analytics that framed his company’s marketing strategy and modeled how he could project (with great accuracy) changes in sales and profitability by manipulating various aspects of the brand strategy and marketing mix.

What he demonstrated was how a strategic balance of marketing investments focused on segmentation and targeting, product development, market expansion, channel relationships, pricing, customer experience and, yes, promotion, were required to drive business outcomes.

This means an investment in research methodologies that go beyond the awareness-preference studies so prevalent in our industry, and integrated business, operational, clinical, brand and marketing strategies that encompass more than promotions. 

3. Lack of ownership at the executive team level for marketing performance

The nexus of the problem may well reside here if marketing is simply viewed as a functional department and not as a core business discipline and competitive competency of the organization. A marketing orientation is derived from an organizational culture centered on customer needs as well as the sum of organizational activities designed to create profitable exchange relationships by fulfilling those needs.

Marketing department activities have limited utility when access, capacity, pricing, products, customer service, clinical quality, physician relationships and other operational aspects of the business are out of whack. It’s critical for the CMO, with the CEO, to drive co-ownership of the marketing goals, strategy and investments – and co-accountability for delivery and performance outcomes – across the entire executive team.

The end game is results

The end game is customer engagement that results in growth, profitability and sustainability. But without full engagement of the organization’s leaders in establishing marketing performance targets, strategies and investments – and without agreement as to the strategic and financial metrics that spell success – the CMO is left to defend marketing department activities and expenditures that appear discretionary, rather than essential, to winning in the marketplace.


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