In the private equity (PE) world especially, marketers are regularly asked to prove their worth. In this blog post, I explore some of the ways that CMOs, Marketing VPs, and other marketing professionals can improve how they report on marketing performance to their CEO or board of directors.

“That’s great, Alex. Now tell me how it’s tied to revenue.” Have you heard that one before? It’s a standard imperative from the mouths of board members and the C-suites that report to them. What this means for marketers is, “don’t show me clicks, show me conversions.”

Tell me why I should care!

It’s a mantra I’ve heard often enough and one I use as a guide while preparing my own performance reports. I’m always putting my board-member shoes on and asking tough follow-up questions. Last quarter, cost per lead was down 2%. So what? Facebook advertising generated a thousand leads. Great, but how much revenue is tied to that activity?

The questions have to be tough because board members and the executives that report to them need to evaluate portfolio company performance, especially marketing return on investment (ROI). This information helps PE firms determine when and how to get involved so that their investment stays on a healthy growth trajectory. This, in turn, is fueling the rise of data-driven marketing and leading to the need for improved reporting transparency.

With so much data available, how do marketing teams best communicate their performance to the C-suite or board? What information do CEOs, portfolio managers, board members, et al. need to see to make critical business decisions?

 

How to Align Marketing Performance with the Expectations of C-Suite and Board

First of all, understand who you’re dealing with here. As Conor Kehoe and Tim Koller, writing for Mckinsey & Company, point out, PE boards can actually be quite engaged. Here’s what they have to say in Climbing the private-equity learning curve:

“PE board members feel like owners them­selves. Senior managers of the portfolio company typically own about 5 to 8 percent of the company stock, and the PE firm votes the rest of the shares […] the boards of PE portfolio companies usually include the “deal partner,” who is typically a midcareer financier, and one other member of the PE firm. There is typically a chair, who is frequently an ex-CEO, often from a much larger company than the portfolio company in question. Additionally, the boards will include one or two other nonexecutives—for example, experienced external nonexecutive directors with specific know-how in the company’s core sector or in a functional topic.”

Of course, that’s just one scenario. I’ve seen other scenarios where management only intervenes when they feel part of the business is underperforming, marketing or otherwise. For marketing professionals, this means that the board is going to want to see specifics around growth performance requirements.

Indeed, your marketing reporting must align with the overall value-creation strategy. How successfully are specific marketing initiatives supporting value creation? In your efforts to report on defined targets, such as progress toward financial objectives, consider the following:

Focus on the Right KPIs

Bring together both financial and non-financial KPIs. From a revenue perspective, you’ll likely report on KPIs like cost per lead (CPL) and customer acquisition costs (CAC). There are other leading indicators of revenue, certainly. In healthcare, for example, these indicators might be appointments booked, new patients, and market share. Patient satisfaction and patient experience metrics are also important as part of patient retention. These might include survey results, aggregate scores, or willingness to recommend.

KPI reports

Your board is going to want to see KPIs that matter to the growth of your organization. 

On the other hand, the CEO and board is unlikely to care much about so-called tactical KPIs or activities. Website traffic, for example, or conversion rate—while valuable to the marketing team—have a much looser tie to revenue. The same goes for engagement KPIs, such as impressions, views, retweets, and so on. The board probably won’t care much about how many blog posts your team churned out, either.

In the end, you can’t go wrong with drawing lines from marketing KPIs to pipeline and revenue growth. Easier said than done; I’ll grant you that.

Read 8 Metrics Every Healthcare Marketer Should Track

Make Closed-Loop Reporting a Priority

One of the most important ways to tie marketing activities and results to revenue is through closed-loop reporting. In this regard, “closing the loop” means attributing end pipeline or revenue growth, for instance, to the marketing channels, campaigns, and other marketing touchpoints that influenced it along the way.

As Salesforce points out in Closed-Loop Reporting and Why It Matters to Your Company, “When using the data gleaned from closed-loop reporting, you don’t have to wonder if the leads produced by marketing across a particular channel end up being a waste of effort. The data speaks loudly and clearly, and an honest assessment can lead you to reduced inefficiencies across the marketing and sales initiatives.”

Let’s take content marketing as an example. While the board might not care much about all the content your team is churning out, they’d probably love to see that leads generated from your whitepapers and ebooks contributed to X amount of incremental revenue last quarter. The same goes for any channel, really—paid advertising, social media, and so on. The idea is to demonstrate marketing’s ROI by focusing on the results marketing helps create, not on the activities to get there.

Attribution Models

Time-decay, U-shaped, and W-shaped are three common attribution models to look into, though there are others.

To get there, you’ll need some kind of attribution model, as well as supporting technologies. Time-decay, U-shaped, and W-shaped are three common attribution models to look into, though there are others.

Read our article to learn more about closed-loop reporting in healthcare.

Implement the Marketing Tech Needed to Gain These Insights

In 5 Digital Marketing Technologies to Rapidly Scale Growth, we discuss a variety of marketing tech for private-equity-backed businesses. A customer relationship management (CRM) solution is a principle among them, as is revenue cycle management software.

The key is to choose not only the right solutions but to implement seamless integration between marketing tech and other platforms that have insight into revenue, appointment booking, product sales, services, etc. With this tech underpinning, you’ll be able to put together reliable, accessible, and shareable dashboards and reports that the board will want to see on a regular basis.

And regular it will be. Writing in Quora, Private Equity Investor Peter Lynch describes “a reporting structure that will survive the hold period. It is generally comprised of the following: 1. a weekly dashboard; 2. monthly financials; 3. quarterly board meetings.” Suffice it to say, marketers will need to have their data, analytics, and reporting squared away to meet these expectations.

 

Communicate Marketing’s Role in the Strategic Vision

Even when you’re throwing the correct numbers up on the board, there’s still work to be done. Board members and executives want to see the dots connected, the right stories told. How do those hard marketing numbers relate to the end goals? We mentioned the content marketing example. What other opportunities are there to tell the marketing stories—using specific examples and numbers—that tie results to the broader value-creation strategy and overarching strategic vision?

This is also an opportunity to tell stories beyond what’s working. Board members need to understand what threats and opportunities presently exist. How, for example, is the pipeline creation generated by a particular marketing channel impacting sales metrics on the other side? Where are the gaps? And what does this more nuanced story tell us about the way forward?

More than likely, there’s a plethora of stories to tell embedded within your marketing metrics—stories your board cares about.

 

Finally, Trade Clean and Perfect for What’s Most Meaningful Right Now

Unfortunately, it’s always going to be a little bit messy when it comes to presenting

. Attribution models, technology integrations, even data trustworthiness tend to be variable—especially for companies with lots of work to do.

So, be really good with what you got. If you can find a way to be consistent in the metrics and stories you present, as well as how you present them—perhaps following the tips I’ve detailed above—you’ll go a long way toward building trust with the board and the c-suite. That means being honest about where the holes, drawbacks, and shortcomings might be, too. There’s nothing wrong with acknowledging a limitation as long as you’re prepared to recommend and explain the corrective action.

In How to Present Marketing Reports to Your CEO and Board, Peter Mahoney of Plannuh calls it telling the whole truth. “You need to tell the complete story of your functional performance. It is expected that you will highlight the best results, but you also learn a great deal from those campaigns that did not go well. If you hide behind the best parts of your marketing plan, the worst parts will never get better.”

I couldn’t have said it better myself.

 

Alex Membrillo Cardinal CEO

Alex Membrillo

Founder and CEO

Some say Alex Membrillo was born to be CEO of Cardinal Digital Marketing. Others say the Flock chose him. Together with his team of high-flyers, Alex has led Cardinal to exponential growth thanks to an innovative approach to digital marketing. Team awards proudly include A Best Place to Work designation and the Inc. 5000 list of fastest-growing privately-held US companies.

A Digital Marketer of the Year by the Technology Association of Georgia (TAG), Alex also contributes to the Forbes Agency Council, with placements in national publications including Entrepreneur, Search Engine Journal, Physicians Practice, and The Wall Street Journal. He’s served as an expert speaker for the American Marketing Association, HCIC, SMASH Senior Care Marketing & Sales Summit, and SHSMD (among others).