As part of the “Taking the Long View – Conversations with The B2B Institute at LinkedIn” series, B2B Institute Global Director Jann Martin Schwarz interviewed IBM's Michelle Peluso, SVP-Digital Sales and CMO. Michelle leads one of the most iconic global brands overall and certainly one of the most powerful B2B brands. She has had an interesting career with stints as a travel startup founder, as CEO of Travelocity and Gilt as well as a senior marketing exec at Citi before joining IBM in 2016. She is also a board member of Nike, another iconic brand.
Jann Martin Schwarz: You’ve just published a very thoughtful report on how marketers can deal with the crisis right now. I want to let that speak for itself and focus this conversation on looking ahead, taking the long view of how B2B marketers can help accelerate the recovery for their businesses and communities. To build the right marketing organization for these times, taking an agile approach, a working style I know you love and have long practiced, seems to be becoming even more important.
Michelle Peluso: This is the moment more than ever for agile, cross-functional teams who share values, have a common mission and can iterate and optimize and be data-driven. Siloed functional teams just take too long. We need teams to move quickly and get 80% right, testing and learning a lot. Teams who really trust each other and practice common rituals and the like.
Jann: Our recent B2B Institute research shows that investment in brand building is the right strategic response for companies strong enough to afford to do so during a recession. But when marketers are facing bad times, they gravitate to the bottom of the funnel. Not because that’s more valuable but because it’s easier to measure, say, leads vs. share of voice and other top of the funnel metrics. What’s your advice?
Michelle: I firmly believe you have to maintain a strong top of funnel presence. All the data I have ever seen reinforces that. If you asked me where to put a dollar right now, I’d say video.
Top of the funnel is certainly harder to measure but it’s not impossible to measure. I always implore other CMOs to please not give up on measuring it. There are more and more data points available for you to measure what brand health means to revenue. Our models have hundreds of variables, share of voice being one of them.
Our multi-touch attribution models are pretty clear about what we have to spend to gain a point in our top-of-the-funnel brand metrics. It’s not a perfect science but it’s incredibly helpful in the kind of conversations about marketing investments that we have to have now.
Jann: What can companies who are currently tempted to “cut and run” from their brand marketing efforts learn from brands who stayed the course? Great brands like IBM — or Nike, where you are a board member — became great by sticking to their strategy and brand codes in good times and in bad. Instead of worrying about creative “wear-out,” they had the stamina to let their marketing message “wear-in.”
Michelle: For sure. Great brands have two things going in their favor. One — they know their customers really well, Nike certainly does, and we at IBM have gotten to know our customer really, really well over 109 years. Deep knowledge of who you are serving will give you conviction about what the brand positioning should be. The second thing is really strong knowledge about who you are and who you aren’t. There is an authenticity in Nike and IBM’s work. That allows you to be consistent and allow wear-in. If you can nail those two things, it’s easy to have a brand that resonates over time and have some conviction about what matters.
Jann: Many B2B marketers are in the midst of very tough conversations with their finance counterparts right now. Our think tank is big on advocating closer alignment between marketing and finance, and we started studying it last year, before this crisis. Even back then, many B2B marketers and their CFOs didn’t see eye to eye. How are you advocating for taking the long view on marketing when CFOs are very focused on short term considerations like cutting cost?
Michelle: It starts with the point you just made. This is why a long-term, strategic, data-driven point of view on marketing that is aligned with the finance team is always beneficial. It’s hard to only come in at the point where the finance team wants cuts and start to argue that marketing is valuable, because it’s a little late to have that conversation, they won’t believe you. Our long history of working closely with finance really enables us to have data rich conversations right now about what any cuts in marketing spend would mean.
Jann: We learned during our research how important it is to use clear, shared language and non-fluffy frameworks like “future cash flow” when talking to the rest of the company about the value of marketing.
Michelle: Absolutely, this idea of shared and common language between finance and marketing is super critical. But I would go way further than that. We need shared data models and a shared system of record that sits with finance, where we back up from there to qualified leads, validated leads, sales systems etc. Boring topics like data flow, structure, standards really matter, because I can’t define a dollar of revenue differently than finance does. I can’t define a high-quality engagement if it doesn’t actually put something of value in our validated pipe. That is really important.
We just did this huge digital event, THINK. What we had to do is work hand in glove with sales leaders to build a lot of tools to track exactly what sessions their clients were attending, what they were engaged in, how to track the leads coming out of that. Just talking about visits to the website or page views, that is not helping a seller put something in their pipeline. It’s about common language and strong collaboration, agile spirit, test and learn, openness to feedback.
Jann: You’ve been both a CMO and a CEO. How can CMOs build better relationships with their bosses?
Michelle: You have to think like you’re the CEO. When I was at Travelocity before becoming CEO, I was running a bunch of the divisions. The CEO came to me and said: “What you did was really great for your business unit, but had you been in my shoes, you would have done it in a way that also supported the other business units.” What he was really saying was that I was myopic in my view of my business and my function within the division. He said: “I want you to start thinking as if you were in my shoes.” That was super eye-opening to me, and it became a filter for what outcomes I was trying to drive, how I could lead differently and better. I realized I had had my myopic blinders on. That’s what happens a lot of times with CMOs. We feel so compelled to defend our brand or our spend. The best CMOs deeply understand business and can help the CEO make better decisions on behalf of the whole company.
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