The next CMO podcast explores topics that are on the minds of forward-thinking marketing executives from leadership and strategy to emerging technologies. And we bring these topics to life by interviewing leading experts in their fields. The next CMO is sponsored by Plannuh makers of the world's first AI based marketing leadership platform.
Peter Mahoney: [00:00:25] And hosted by me, Peter Mahoney, the founder and CEO of Plannuh along with my cohost Kelsey Krapf
In this episode, Kelsey and I speak to McKell Vonda watering McKell is the founder and CEO of accountable marketing expert. And he's written a book called the yes, accountable marketing. As you can tell, he's pretty focused on accountability and return on investment within marketing. So I'm sure you'll enjoy this conversation.
Kelsey Krapf: [00:00:55] well thanks so much for joining us today. Michiel from the Netherlands, really excited to have you on the next CMO podcast would love to learn a little bit more about you and what you do at accountable marketing expert.
Michiel van de Watering: [00:01:09] I'm a very thrilled to being on a show. And I thought I started my company in 2004. Under the name of accountable marketing I really wanted to support marketing leaders to show what their added value is to the company's bottom line.
Peter Mahoney: [00:01:24] One of the things that I really liked about some of your work is that you advocate something that I'm a big fan of doing, which is.
Measuring before and measuring after and measuring before is it's estimating, right? It's not really measuring before it's building a model to get a sense of before. So just describe a little bit about what that approach means to you, how you think about the value of trying to determine what the what the return on investment will be before you actually.
Michiel van de Watering: [00:01:57] Yeah. Yeah. It was always an interesting discussion with the marketeers MIT. They work together with creative agencies and media agencies and they came with a plan. And of course there were all these proposals from the agencies, so they really understood very well. What. Actually it cost not an investment of the campaign would be, but if I would ask them then about the number of customers coming in, the number of products that they think they were selling through this campaign, they were gave me a kind of stuttering answer.
So then we introduced what we call a pre IRI and a post RRI. And the pre PRI you said it already, it's an estimated. So at first, even addition, gesture mate, which means that you're doing. You just guess what the numbers will be, and that's fine for the first time or the first couple of times that you're doing it, but Ben, you're building just a simple model.
You write down the numbers that you would like to see in your campaign and afterwards you can see whether you've reached them right. And the difference is the learning. So if you said we were getting 10,000 customers and you only got 8,000, then you learn that you may be a little bit too optimistic.
So if you figure out what your pre return investment is, you can compare it to the post return on investment. And actually, if a marketer fails to present me, the posts are I we also prevent him or her to continue developing any more campaigns. They first have to show me the. Make me understand why the difference where the difference came from.
And and that really helps if to to develop some new campaigns and to understand that the return on investment at 400 bill B. It's if you put in, maybe you've heard of the term hurdle rate. So we give our marketeers, our hurdle rate which they have to meet or exceed. So let's say 15% for any marketing investments and the pre return investment should meet actually the 15%.
Peter Mahoney: [00:03:56] That's great that you provide that because a lot of marketers don't really have a clear understanding of. What success looks like. So what is a good return on investment for your company? And that it's a critically important thing to understand, obviously, because you may show up to your CEO or your CFO and say, look what I've done.
I've generated. 10% return on investment for a, for what I've done. And they said I can get 60% return over in this in my R and D investment or by buying back shares of my company, I can do better, et cetera. So there, there are lots of different ways to look at that. So when you have people look back and I love the discipline of.
Going back to come up with this analysis of what happened versus what you thought was going to happen. What are some of the common things that you see as the reasons why people were wrong with our estimates?
Michiel van de Watering: [00:04:59] Most of the time they're far too optimist. Because most of the time we are a little bit behind or maybe add to the Hulu, but they're too optimistic and they forget about anything that's happening in the markets. They forget about general international events that are happening. I forget about what our competitors are doing. And that's the main influences where things go wrong, but also in the process. If you figure out where is a media company, a media agency that you will spend a couple of times a ping pong in the contract.
Before you get the final, a radio commercial, or a television commercial, or set of of materials for the internet. And you decided that it only takes you two times and immediate change say has to do five times. Then they will give you an a, another invoice, which is not like the proposal they've done to you.
But most of the time it's caused by the company.
Peter Mahoney: [00:05:57] Yeah, there, there certainly is. And it's interesting. One of the challenges that we try to help our customers with is doing a good job around actually measuring what they've spent organized by campaign, because that, of course, as you probably know, is a difficult thing to get in some companies in tracking that detail, really understanding what you spend.
On a campaign by campaign basis is sometimes difficult because you may have media costs, production costs, other related expenses, consultant costs, things like that, that are spread all over the place. And yeah. And so are you encouraging people to, in to include all of those costs?
I assume beyond media into there now.
Michiel van de Watering: [00:06:42] Yeah, the, you should put all the costs related to a certain campaign, or maybe we should say a set of campaigns with a certain goal and you put in all the costs and of course also LD expenses. And of course you need to understand what the revenue is related to these set of campaigns.
And so the cooperation with a CFO and the financial department is very important to make sure that only cost related to a campaign. In the general ledger to that certain campaign and the same goes for the revenues. You really need to understand where the revenue is coming from and edit is related to a certain complaint.
And therefore you really need a cooperation with the financial department. Sometimes even we have added a controller financial controller to the marketing team, not as to control the marketing team. But to support them in getting the allowable cost for water and making sure that all the administration is taken care of and that they can present to the board what the cost or the investment were of the set of campaigns and butter revenue, as well as from this set of campaigns.
And then of course the board will credit them for it. And they will really understand that the outcome are correct because a controller had been added to the market.
Peter Mahoney: [00:07:55] That, that makes a lot of sense. Although I assume that some of these people probably could have used Plannuh, which made it would have made their lives a little bit easier to track all this stuff.
But I was going to ask you Mikael the the w what was the inspiration for building this business? It sounds like you, you saw it. A problem or an opportunity, I guess they can be the same thing. And you've been doing this now for more than 15 years. So it seems like there's a lot of problem and a lot of opportunity out there.
What are the things that really inspired you to get started in this.
Michiel van de Watering: [00:08:27] I see that management understands that the whole company is accountable.
If the plant manager would like to buy another machine, he probably go to the CFO and they build a business case and they decide whether or not to buy a new machine and sell the old machine every say, here to another. So they understand that there's a business case when their marketing manager or marketing leader wants to change a campaign or have another completely other commercial on television, then he, or she can just decide to do it, hire a media agency and a creative agency.
And they start from scratch making a new campaign.
Peter Mahoney: [00:09:02] Yeah. I find it really amazing. The lack of scrutiny. That some marketing decisions are covered by, and I was just looking up these numbers last night again, because they're always mind-boggling. But according to group M. The marketers spend somewhere around $1.6 trillion annually on discretionary spending.
And that's a lot of money. And it's amazing. Like you said, Miquel if you are going to make a, an it department decision or a manufacturing decision, Oh, you're going to actually have to come with a pretty rigorous business case, even if you're spending $50,000, which is a lot of money.
But you may have marketers spending hundreds of thousands or millions of dollars. And and they haven't always been held to account, but that I believe is changing. And in your 15 years, if you seen a change in the scrutiny that marketers are experiencing with their.
Michiel van de Watering: [00:10:05] Yeah. One of the things that really supports them is the majority of software tools like Plannuh it's much more easier now for them to to keep track of of investment in marketing and keep track of the reasons.
So marketing and sales might not ever always go together very well with marketing and it might be even worse. Because I still would like to know what they need for over next three months where marketing would like to say. Needed yesterday. So I think the majority of software tools it's so good now that, and also for small companies, if you have all these software as a service tools that can use, I've been working for a large telco here in Holland, and we've built a marketing machine for millions.
Actually. Millions said that it costs in euros which is now available for a couple of hundred dollars. And that has the same number. It's the same possibilities, the same feature.
Kelsey Krapf: [00:11:02] I'm curious what the main drivers are for a company to deploy accountability. We all know that we need to measure.
Campaigns and our marketing efforts and actually track the marketing ROI, what does that last straw of a company says, Hey, I need to measure accountability.
Michiel van de Watering: [00:11:16] I think especially nowadays certainly for the companies that didn't get a good base. During COVID. Some companies really profit from the COVID situation, but the companies who didn't, they really cannot afford to waste any dollar on whatever investment they are doing.
So they really need to know what the return on investment will be on marketing as well. And so that's more the top-down approach and the bottom-up is that really marketing. Are, especially in new market theater, is there a new school marketing? It doesn't mean their age, but the new school market. Yes.
They really want to approve a present the added failure to the company's bottom line. And they really would like to celebrate together with sales, finance, and operations. What the results were after their marketing campaigns, they cannot do it on their own. And it's also great to share the credits that usually only go to sales.
Peter Mahoney: [00:12:08] If you seen any examples of how an investment analysis has been surprisingly positive when you look at w when you look at it, and maybe you thought it was not as interesting as an outcome initially, but then when you really looked at it, you realize that the investment actually made a pretty significant impact.
Is that ever been something you've.
Michiel van de Watering: [00:12:36] Yeah, because well, most of them companies that don't have a clue, so they cannot tell the outcome. But when they're when you are really senior return on investment, then it's also very great to know a winter return investment. Didn't meet any hurdle rate or wasn't very good, so they can stop there so they can save budget there and put a budget to the places where they really got the good results from.
If that's what you were asking.
Peter Mahoney: [00:13:01] Yeah. No, absolutely. That makes a lot of sense. And if you if you look at the kinds of campaigns that you think is there a theme of certain kinds of investments that you see delivering better outcomes than others?
Michiel van de Watering: [00:13:15] The easiest one is I think everything that is improved online because every activity online can be measured and can be tracked down.
So that's an easy one. It's harder to you have to do some investigation. If you want to know what the outcome is of a television commercial which is harder to reach out. And I think that's also a driver for the accountability of marketing, if learned so much from the online marketing activities.
And we understand that everything we do there, we can measure. The management board is also asking and actually requiring marketing. If you can measure online, you should be able to find a way to measure offline as well. And of course, there's a lot of relation between open, online television, sorry, a radio commercial shouting out loud, a very easy to remind a URL, internet address to go to.
And that your visitors number of visitors increase a lot around these commercials. Then there's a relation between those two. So I think that's really it. Picking up now that people understand where it's coming from. And the other one is not only online marketing, but for direct marketing when somebody returns a coupon, we know that he, if you've written, if sorry, you've read our letter and our brochure and return the coupon.
So we've learned a lot from there.
Kelsey Krapf: [00:14:37] Miquel I know you were talking about everything that we can measure, and we can both agree that there's so much data and it's overwhelming at some points. I don't know how to dissect it. What are some of those limiting beliefs of marketers feeling as if they can't measure accountability, they can't measure their marketing efforts.
What is it that, steers them to look at increased traffic or, some of the metrics that don't really matter.
Michiel van de Watering: [00:15:00] Yeah, I think the first limiting belief is it can be done period. And that's very funny because sometimes they really put out some measurable goals and then they say we cannot measure what's happening.
And the other limiting beliefs. Might be frightening for marketers is about creativity. They find it accountability, because it sounds like numbers and number crunching is killing creativity. And I would like to turn that around because if you're accountable and you're able to prove and present your return on investment of certain campaigns, and then it will be able to, instead of sending out a sticker in a middle campaign to a million people.
There as you should have developed five or six different campaign sets because there are different types of customers in this group of over a million, you have far more creative because you have to create other auto sets of campaigns to send out to the smaller groups, maybe 1000 or sorry, maybe a hundred thousand to 200,000 people in south of just one stuck in the middle campaign to a million.
So, I would really say the limiting belief is it kills creativity, and I say it will boost your creativity.
Peter Mahoney: [00:16:13] I like that. Th that's great. And I think the idea of. Of measuring things that are hard to measure. It is a topic that comes up a lot in our discussions with our customers. And we actually just did a webinar on measurement and I think it came up.
And the one example I always remember is that, that about trying to get creative around understanding the impact. Is is to look for kind of proxy metrics to see if other things change and set up some experiments to see if you can see some behavior changes.
And I know one, one thing we used to do is one of the businesses that I ran had a direct to consumer kind of marketing. Marketing opportunity. And we tried for a first time, a set of experiments using radio advertising. And we were a little unsure how it was going to work. But we found that one of the things we could do is by measuring the increase in web visits and transactions based on geotarget.
We have the ability to match the to match the performance to the radio markets that we're advertising in. Because the nice thing about radio is that it's geo-targeted so you can pick a major radio market and it's a little bit hard to tell and it's. It's easier to do when you have a lot of transactions, because with a lot of transactions, you can start to measure the change over time in and sort out whether there was an impact.
But by, by taking that approach, what we're able to do is say, aha the baseline change over time. Based on time seasonality, overall brand, et cetera was 5% this month, over that month. But in the radio markets, it was 15%. And in that translated into, 20% more sales and as a result, you could calculate the impact based on that.
So there are ways to do it in, in, I think. It's, it can be a little bit trickier with B2B applications because in B2B you tend to have fewer transactions, but I liked the idea of at least starting to measure higher up in the funnel and starting to see what the impact is. Maybe. Visits as an example, which might be again, you're going to get more visits than you're going to get sales.
So it gives you an a, tends to be an early indicator to a, to what's going on is that is, do grew with that technique. And are there other approaches that you'd look at to try to measure marketing efforts that are a little bit difficult to measure otherwise? Yeah,
Michiel van de Watering: [00:18:55] I'm very keen on, on using a funnel and understanding the conversion ratios in the funnel steps and forest.
At first, you estimate them and later on you measure them and of course see the changes which can also be a prediction for the next step, because you understand that somewhere your conversion rates are behind or. Much higher than any assault. So then, what's going to happen further on in the funnel.
And so I want to think to mark the issue, think about what if the next it's like computer programs are built if they're next. So if the customer responds to our campaign, what do we do? But also, if they don't respond to a campaign, what do we do next instead of, oh, here I'd be here at the numbers.
That's figuring out what our next step will be. All. Let's keep them thinking about what will be the next step.
Peter Mahoney: [00:19:48] That makes a lot of sense. And one, one of the things I was going to ask, I try to pop. A few levels here. I know that you've opined a fair amount in your book and in your other writing about how you get an organization to take on accountability, because it's one thing to say, I, as an individual market, or want to be more accountable, I want to do that, but what does it take to get an entire organization to embrace accountable?
Michiel van de Watering: [00:20:17] Yeah, it starts with the awareness and the awareness can be happening in the top, in the boardroom where the C-suite have heard about we want to have marketing accountable and we've looked on the internet and we've seen a couple of possibilities and the other awareness can also be created in the marketing team where a marketeer really doesn't like that.
He's not getting any appreciation for what's he bringing to the table? So it's a bottom down and it's an a and a top-down and bottom-up does it work? And also with, I think with with salespeople, they really would like to have quality high quality leads instead of just leads.
And and that's also part of how you manage your funnel and about accountability and marketing. So cooperation with sales and finance is very important here, too, to get the team ready for it. And of course, A sponsor that will be how help best the sponsor in your senior management, who will provide time effort and money to make sure that whatever is needed trainings, software tools, maybe you go to a seminar or a webinar or nowadays to make sure that the whole team understands what is involved in accountability of marketing, but you also might have.
And it's part of my approach. We also have to do some testing on the team because maybe they are very creative marketeers, but maybe some marketers who will not be able to understand what accountability is all apart and you need them both. So if they are very artistic, creative, I call that then you might need to have some other people on your team as well.
Peter Mahoney: [00:21:53] So when marketers hear the word accountability, sometimes they hear consequences. And maybe it's a little scary, but I know from your view, there, there's a lot of value to the marketer in having an accountable organization. Can you just summarize that for people who may, we may have scared away by saying, oh my God, this is, this sounds like a, this sounds like I'm going to get fired if I don't deliver my results, but there, there are benefits of being accountable at the same time.
Can you talk about some of those
Michiel van de Watering: [00:22:24] things? Yeah, one of the benefits, maybe I've just mentioned in, instead of just developing one campaign for a very large audience, you will be able to create a couple of campaigns, different campaigns for different people in your audience. So different, smaller target audiences, which is very, I think very great fun to do.
Instead of just, yeah. Bringing out one campaign and not very happy with the results. That will be great. Another thing is that if you have good results, then you will be appreciated for it. And if the results are bad, you should be rewarded for it to show why the results are not. Don't be too sad about punishing somebody who comes in with successes and a reward.
Somebody is big failures, which gigantic failures as long as of course, as they understand why it was a failure. It's very easy to say afterwards. Yeah. This campaign was for everybody. Whereas at a prompt, we were all agreeing that it was a great campaign. So really would like to have marketeers.
And I think their esteem will grow. Their appreciation was in the company, but grow anybody who's telling them that they're wasting the money. I'd like to saying your waste 50% of the marketing budget, but you don't know which 50% they will be able to answer to that. And it will show. What's happening in the social media, what's happening in any other campaigns that they're running.
So they can be really proud of what they're doing. And that's not a thing that will bring accountability to them. They will get on our more strategic level because marketing has changed to a more technical part in a company. Now, I think the strategy strategic insights from marketing are very important, so they will increase their level within that.
Kelsey Krapf: [00:24:07] I think my colleague Bram is such a great point about just gaining the respect and accompany. Once you gain that respect, you also, it's better for marketing collaboration. It's better for the overall morale of the company. If you're understanding, what you're contributing to the business and actually reaching those top lines.
Peter Mahoney: [00:24:25] And one of the other things that it reminded me of Miguel is the concept that we tell people about a lot is about the idea of trying to approach marketing like a scientist and in the idea is, and this is the idea of celebrating failure. As long as you learn something from it and you should be encouraged to run experiments and I think it's an important nuance and accountability.
It, it doesn't mean that if you fail, you get fired what it means. I think I don't want to put words in your mouth. I'll tell you what it means to me. And you tell me if you agree or disagree, or if you have more to add to me, it means that you are accountable for estimating what you're doing, having a solid plan.
And reporting the results and explaining those variances and then ultimately making the decisions that are going to get you those improvements over time. So maybe that was not the pithiest shortest description in the world, what would you add there to your definition of accountable?
Michiel van de Watering: [00:25:28] I absolutely that you're alert and from your past and that will bring it to a more strategic level. So that's the most important part. And of course, You might be afraid that if we are showing you the results, the return on investment of let's say last year then we might find some places where actually the money has been a waste that we can only tell that afterwards.
That sometimes is yeah. Is is why market marketing leaders are hesitating to work with me because of my pre-fill what has happened in the past. Whereas I think their management team was sitting there and sitting there next to them. Senior management. They didn't do anything. They didn't provide them with people with resources, with budget to make sure that everything became accountable because you need to inverse there.
And that's one of the yeah. Scenarios are really dislike when I'm working with a marketing team and then certainly the CEO comes up and say, Hey, Miguel, we feel you're investing about $50,000 in. In research to see what's happening in a campaign errata would like to have two more advertisements in our in our regional newspaper about that.
And they said you're blindfolded me. Because you expect me to come up with a better campaign after two months or so, but now you're blindfolded me because you're taking away my research. So I do not have a clue what our campaigns are doing and yeah, probably the two ads in the newspaper. Yes. They might bring some new work customers.
They might bring some new revenue, but that's only for the short term I'm in marketing. Is there for the longer term for more strategic way.
Peter Mahoney: [00:27:05] That's great. I completely agree with that. I know we're coming up to the end of our time here and I wanted to but before we move on to the last thing, I wanted to make sure that people had some information about how to reach you.
We'll put that in our show notes, by the way. And you should just briefly mentioned that not only do you have this great book, but you also provide some. Training resources and classes and things like that. You might just mention that briefly before the last one. Tell us just briefly about accountable marketing and in what services.
Michiel van de Watering: [00:27:38] Yeah, the service I provide is to create the awareness when there is no awareness about the need for accountability of marketing. I make sure that the CMOs is learning how to speak the language of the CFO and the CEO. I see whether we can bring in some some tools, some SAS tools like Plannuh of course, really looking forward to a tremendous at at our growth.
And then the easiest one is the pre and post. Our right training that I provide is as a, do it yourself course to make mark POS very easy, understand what's happening in the process. When they're able to present a pre IRI, when they're developing their campaigns and they're able to present a post, our Ivan, their evaluating their company.
And then the book, as you mentioned, it's the title is also the URL. So it's yes. Accountable built marketing. So it's www of course dot yes. accountable marketing, because I think everybody should give it a big yes. And embrace the accountability of marketing to increase their marketing effectiveness.
Peter Mahoney: [00:28:37] That's excellent. And we'll have, as I mentioned, put some of the links to those resources in the show notes, so people can get them easily and definitely check out the courses, the book, and the other services that Miguel and his team provide. And it was really great to have you on the show.
But one last question, I think before we leave, the Kelsey has a okay.
Kelsey Krapf: [00:28:58] Like hell, obviously we learned so much about this con in this podcast about the value of staying accountable and holding yourself accountable. So besides that aspect, what advice would you give to CMOs and those aspiring to be one sentence.
Michiel van de Watering: [00:29:11] I think that CMOs should really be keen on their strategic role. They're playing in a company and they're, we're able to motivate a team and inspire the team to show results always to be keen on the people who are showing results that are. As good as you would like to, but at least make sure that there's an environment, a safe environment to present things that are off and so enable to learn from that and get better results in the future.
Peter Mahoney: [00:29:43] Excellent. Great advice McKell and thanks again for joining us. And I think with that, Kelsey, you're ready to take it.
Kelsey Krapf: [00:29:51] Yes. Thank you so much for your time today. Macau, make sure to follow the next CMO and Plannuh on Twitter and LinkedIn. And if you have any ideas for topics or guests, you can email firstname.lastname@example.org.
Have a great day, everyone. Thanks.
Peter Mahoney: [00:30:07] Thank you.