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Thomas Barta: Why your marketing team should lead, not follow

Being seen as a cost centre rather than a revenue source has severe consequences for marketing.

No-one wants to sit at the kids’ table. But marketers risk being locked out of the adult decision-making process if they don’t step up and prove their team is a revenue centre. Marketing leadership maven Thomas Barta opens up on how to make that happen.

Everyone knows that in businesses you’ve got to spend money to make money. But they also know that if that spending doesn’t make money then it’s a poor business decision indeed.

It’s why, if you’re a marketer, recent research from marketing leadership guru Thomas Barta could set alarm bells ringing. A former McKinsey partner and one of the world’s premier experts on marketing leadership, Barta found that less than half of C-suite executives believe their company’s marketing expenditure is significantly contributing to revenue or profitability.

“In other words, your CEO may not trust that you’re spending the money well,” Barta explains.

Being seen as a cost centre rather than a source of revenue can have severe consequences for a marketing team. Not only are departments that are not demonstrating good returns on investment rarely on a CEO’s list of Departments to Which to Give Bigger Budgets and More Money, they are also more likely to face cuts when a business faces difficult times.

That mistrust generally stems from a perception that marketing teams aren’t involved in the heavy machinery of any business.

Barta says top executives usually rated pricing, strategy and product development as the most important business functions. But his research found fewer than one in three senior marketers had any input on pricing, and just 38% on strategy. More than half were involved in product development, but Barta says the overall effect was that the work marketers do is seen as less important by many C-suites.

“That’s perhaps unfair (and incorrect) but perception is reality,” he says. “If people think your work isn’t important, you won’t be seen as important.”

Proving the financial return of marketing spend has of course vexed most marketers, but Barta says there are a few strategies they can deploy to earn greater sway and trust among senior executives.“Your influence and contribution as a marketing leader go up when you work on the company’s biggest issues, so it’s critical to get involved in what matters,” he says.

Barta recommends setting one’s sights on the company’s biggest growth levers and concentrating efforts there. If that means a large shift in strategy that is difficult to sell up the chain, start small.

“As a marketing leader, when you engage in a new field, take small steps but have the end in mind: long-term profitable growth,” he says.

Highlighting marketing’s effect on that profit and growth is also vital, but Barta says that many marketers struggle to institute an effective system of measuring returns on investment, and recommends getting the finance department involved, working with their experts to jointly define how returns should be measured.

“You’ll find that most finance professionals understand very well that not everything can (or should) be measured,” Barta says. “But problem-solving this jointly will greatly increase the credibility of your numbers.”

Barta also recommends marketers not shy away from showing their returns to senior leadership regularly.

“This can feel scary, but sharing your estimated marketing returns with top management is one of your best ways to build credibility as a leader,” he says. “Crucially, sharing returns includes sharing the failures.In our experience, marketing leaders who open the books get more support from the top.”

Another fundamental, Barta says, is opening the bonnet on your marketing model, helping those who matter understand how it works. “It’s your job to ensure people understand what marketing does and how it’s driving the business,” he says.

“By showing how, in the eyes of others, marketing concepts like brand preference have a big impact on sales, you’ll significantly increase the leadership’s understanding of your work and how marketing helps drive business performance.”

Barta also recommends tapping expertise from outside the marketing department when building marketing models. Taking input from others, such as those in finance or sales, will give your marketing model more heft.

“When you spend your money well to attract profitable customers, the business grows,” Barta says. “And when you produce visible returns, you are more likely to get more support and more resources—which in turn creates even more revenue and profit. It’s a pretty simple equation.”

Thomas Barta is delivering a keynote entitled The 12 Powers of a Marketing Leader – How to Succeed by Building Customer and Company Value at the B2B Marketing Leaders’ Forum APAC, which takes place on 16-18 May in Sydney.

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