CFOs often echo retailer John Wanamaker in saying, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
It’s sad that Wanamaker’s words from over 100 years ago are sometimes used against us — since he was actually a marketing pioneer and advocate who was trying to quantify marketing effectiveness. I like to think he’d be proud of today’s CMO.
When I meet a CFO for the first time, I say, “I’m going to be your new best friend, and you’re gonna love marketing.” Then I go into my spiel about how a great marketer uses both halves of the brain — creative and analytical — in pretty equal measure.
“So I’ll suck it up and take the budget cuts right now without debate, but someday soon I’m going to come back with a request for more money based on return on investment," I say then. They usually react with, “Good! I look forward to that” — in a tone that sparks intrigue and a tinge of skepticism.
are six Wanamaker-worthy aspects of effective retail marketing to apply to health care.
The First Hire. Most people jump in and start building their creative and strategic marketing teams first. Don’t. Go find yourself some brainy data scientists and inquisitive researchers. It could take two years to build a reliable base of insights and analytics, so get on it.
The Proof. Introduce that analyst to your CFO to explain her super-predictive multivariate adaptive regression splines algorithm in a way only a data scientist can. In health care, our marketing mix models measure new patient appointments or pharmacy prescriptions. They factor in all the stuff we did (TV, radio, out-of-home, print, digital, social) and exclude the stuff we can’t take credit for (weather, flu trend, competitors, new stores or medical offices).
The Savings. Let’s face it, marketing is one of the top spenders in most companies. What if we could also be one of the top savers? Make sure your CFO knows everything you’re doing to streamline production, improve retention of existing customers, limit recurring research studies, optimize campaigns, automate processes, insource high-cost functions (or sometimes outsource for savings).
The Science. Take your CFO on the tech journey. As one of my favorite CFOs, Jeff Crudele, says, “Showing us the science part gives us confidence we are getting value for the art.” Share how you use retail practices like facial coding and ad pre-testing to make sure your ads are moving the needle on branding, impact, and likeability.
Educate your CFO on how you reach specific audiences with geofencing, identity resolution, retargeting, and competitive conquesting. You’ll know they get it when they reach for their phone to double-check their own location, microphone, and app settings.
The Experience. Net Promoter Score (NPS) — likelihood to refer to friends and family — is one of the best predictors of loyalty. Make it real by working with your CFO to correlate NPS to retention rate and revenue by market segment.
The Customer. But whatever you do, don’t let the ROI drumbeat drown out the voice of the customer. To improve the lifetime value of your customer base, you have to start with giving your customer value. My former and most marketing-minded CFO, Brian Setzer, says it best: “CMOs can teach CFOs that focusing on your customers first results in great financial outcomes. Focusing on great financial outcomes distracts you from focusing on your customers.”
Whatever an organization’s aspirations or market challenges may be, excellence depends on the CMO and CFO understanding each other, aligning on strategy, and supporting each other’s work.
The author won a Gold Effie Award for Highmark Health in 2018.