Think Like a Marketer, Talk Like a CEO

Episode Transcript

Kelly Callahan-Poe: CEOs don’t buy tactics, they buy outcomes. And if you can’t make that translation as a marketer, you’re not just losing the budget conversation, you’re losing your seat at the table. I’m Kelly Callahan-Poe, host of the Marketing Moms podcast. Today’s episode is called Think Like a Marketer, Talk Like a CEO with Rich Smith.

Rich helps leaders decode why marketing works by translating behavioral science into strategy CEOs can trust. With 30 plus years of experience as a CMO and executive driving billions in revenue, major turnarounds and high impact growth areas, Rich is the founder of the Rich Smith Growth Studio, host of the Revenue Science Podcast and a frequent speaker who bridges the gap between marketing and the boardroom. Welcome, Rich.

Rich Smith: Thanks so much, Kelly. That was a really nice introduction. I appreciate that.

Kelly: Of course. I really wish I had this conversation with you 15 years ago, and I think a lot of marketers will wish that as well. So let’s start with the question of walking us through what’s actually happening in the room when a marketer is presenting to a CEO the standard awareness and engagement numbers, all those measurable metrics that we track on a regular basis. And then the CEO is unable to process that or maybe even mentally checks out.

Rich: Yeah, I think you said it really well in the intro and that CEOs buy outcomes, not metrics. And so when you walk into your CEO’s office or the boardroom as a marketer and you start talking about things like engagement, likes, followers, page views on your website, it’s not that these things are not important. We all know that they are.

But what the CEO is hearing when you say that is you’re talking about these vague, upper funnel metrics and they don’t see how those metrics connect to the things that they do care about. They care about revenue and churn and cost of acquisition and your net retention, your net revenue retention rate. All of those — that’s what drives the business forward. And as a CEO, that’s what they’re looking for.

To oversimplify the problem, it’s really taking your marketing language but translating it into language that the CEO actually understands and cares about.

Kelly: So it’s really actually also about communicating more clearly about the outcomes, not just doing marketing speak, right?

Rich: Definitely. There are a number of cognitive biases that we all have. I think there’s something like 188 that have been documented by researchers, but there’s a few key ones that really drive this problem. One was initially written about by Daniel Kahneman, who’s a famous behavioral economist — really the grandfather or the founder of behavioral economics.

He had this catchy phrase called WYSIATI, which is an acronym for What You See Is All There Is. Leaders like your CEO will overweight what is visible and concrete like pipeline, revenue, churn, and they will underweight what is probabilistic or delayed — things like brand consideration, preference, views, traffic on the website.

Kelly: Yeah.

Rich: And so that’s one reason why there is this disconnect. Another one is just basic loss aversion. When a business is missing targets, leadership becomes allergic to spend that does not map to near-term revenue. Outcome bias — if revenue is up, everything looks smart and we’re all geniuses. If revenue is down, everything looks suspicious, especially marketing.

Kelly: Yeah.

Rich: Right, so that’s another one that causes this problem. And the last is confirmation bias. Confirmation bias means that we look for information and data that support views that we already have. That’s what happens when you walk into the boardroom and marketing is showing dashboards that prove what marketing says matters is working. Finance shows dashboards that show spend needs scrutiny. Everyone’s got their own numbers and as a CEO, you’re at a loss. Your default is to go to what’s immediate and obvious within the business.

Kelly: Which one of those four behavioral science principles do you see derailing marketers the most?

Rich: I think it’s really probably loss aversion that derails your marketing initiatives the most. That comes back to short-term thinking — it’s hard to pull those two apart. As a marketer, it can take six months to a year to change the trajectory of an organization or a product line. Telling me that I have to get something done by the end of this quarter — what am I going to do in the next two weeks? It’s really pretty much impossible. So as a marketer, you’ve got to think about how do I extend those time horizons for the projects we’re working on, then chunk them into digestible quarterly or monthly bite-sized pieces that lead to that final outcome. And then you’re talking about metrics that can be measured in the short term — because it’s metrics on progress towards that long-term goal.

Kelly: So what you’re talking about really is this six-part CEO translation layer for presenting marketing strategy — almost like a translator for CEO speak to marketing speak and vice versa. Can you walk us through this?

Rich: Yeah, sure. There really are six things that I think should be part of your presentation to your CEO or board. First is the business goal. What are we trying to change? Put it in terms of ARR growth, revenue growth, churn, acquisition cost reduction, margin. So what’s the goal? What are the constraints — what’s stopping it today? Is it pipeline quality, adoption, pricing power, sales cycle? Next, what is your strategic bet? What will we do differently? Is it positioning, segment focus, different channels, different offer? The mechanism — why will it work? What’s the why behind the strategy? Number five is economics — what does a win look like in dollars, ROI, payback? And then the last is the decision ask — what are you asking leadership to approve? Budget, headcount, priority, trade-offs with other projects? If you structure your communication with those six pillars, you will have a much more effective conversation with your leadership team and your CEO.

Kelly: As a follow up to that, you also talk about a metric Rosetta Stone for translating marketing metrics to executive outcomes. Can you explain this reframe?

Rich: Yeah, it is similar. What I’ve done is think through some terms that marketers commonly use and translate them to how you should actually talk about this to your CEO. So let’s say you’re using a metric like followers or reach — when you’re talking to your CEO, you really want to talk about penetration of your ICP, your ideal customer profile. Are we in the right rooms? If your metric is engagement, what you say to the CEO is we’re measuring message resonance — does the market get what we’re saying? Traffic is demand capture capacity. Leads and MQLs translate to pipeline creation cost and conversion quality. Conversions talk about cost of acquisition drivers. Brand awareness talks about pricing power and conversion efficiency over time.

That last one is important. A lot of CEOs really discount the value of a brand — partly because of temporal discounting, over-weighting short-term versus long-term objectives. But also because it just feels unmeasurable and soft. If you frame it as, the reason we want to invest in our brand is that’s what’s going to drive pricing power — and that’s what’s going to improve our acquisition cost and conversion efficiency over time — that changes the conversation.

Kelly: And again, it doesn’t just drive pricing power, it drives choice. The more you’re aware of a brand versus the other brands — and you should be testing that on an annual basis, where you fall in that lineup — if you’ve spent more money this year, did your brand increase? Those are important things as a marketer to show your CEO: I spent your money well, I was able to increase your brand awareness by 10 percent, we’re now just under the second competitor.

Rich: 100%. But when you frame that to your CEO, you frame it as: the objective is not brand awareness. The objective is pricing power, cost efficiency of acquisition, improving conversion rates, and improving choice. That’s the translation that we as marketers need to make — because I’ve had those conversations where we need to spend X on brand and the CEO is like, there’s no way we’re spending that. Why would I do that? That seems like a total waste of money. The way you bridge that gap is by framing it in terms of outcomes that drive the business.

Kelly: I would probably love to talk more on that topic. Let’s move on to the next question. I like this one because marketing isn’t necessarily aligned with how a CEO looks at an organization. You posit the question: what if we treated our marketing budget like an investment portfolio, as if you were the CFO of the company and not the head of marketing? What do you mean by that?

Rich: In my experience in the C-suite, the one C-level executive that is relied upon more than any other by the CEO is the CFO. They’re typically pretty much joined at the hip. So when you frame a marketing investment in the way that a CFO would frame it to their CEO, you have a much greater likelihood of getting them to understand what you’re asking for — and approving it.

What I like to do is break initiatives into three buckets. They’re either Harvest, Build, or Explore. Harvest means we’re going to protect revenue now — retention, lifecycle, conversion rate, win rate, enablement. Build means we’re creating future demand — projects like brand, category narratives. And Explore means here are the controlled experiments we’re going to do — new channels, new segments, new offers, new messaging. Breaking it down that way and managing those projects as if they were an investment portfolio makes sense to a CEO because it is an investment. It’s somebody’s money. And if you treat it like an investment, your CEO is going to react a lot more positively to that.

Kelly: So let’s say a business is in distress or missing targets. How do you recommend a marketer recalibrate?

Rich: There’s no real simple answer. I think one thing to look for is: are we really aligned on what we’re trying to achieve? Does everybody on the leadership team have a good understanding of what the most important objectives are? Have those objectives been filtered down to show people how what they’re doing on a day-to-day basis attaches to those objectives? Fostering that alignment is foundational — whether you’re growing successfully or trying to get on a higher growth trajectory.

Another thing: take a close look at what your customers are saying on sales calls. As a CMO, I’ve done ride-alongs with salespeople in a B2B environment, listened to Gong recordings, walked the sales floor in B2C and plugged in next to sales reps to hear what customers are actually saying. Because if salespeople are getting questions like “can you go back to that? I didn’t really understand that prior slide” — you know your message is not resonating. And if your message is not resonating, then you’re not attracting the people who are in your ideal customer profile effectively. It doesn’t matter what the tactics are after that — you’re probably not going to succeed.

Kelly: One of the things that I thought was the most provocative in our initial chat was a stat from Gartner that cited that 40% or more of CMOs who push for bigger brand budgets without connecting to business outcomes will lose C-suite influence. What does that actually look like in practice and how do you recover from that?

Rich: Yeah, and look, I’ve personally experienced that. I wish I had had this conversation with me 15 years ago too. I think the reason it happens is because of everything we’ve been talking about. If you go in and you’re simply talking about a brand campaign and building brand awareness without connecting that to business outcomes, what the CEO is going to hear while you’re talking is “boondoggle.” They’re going to hear, you’re wasting my money. They’re not going to understand why that’s important because you haven’t told them how it ties to the outcomes that they care about. So if you talk about brand awareness without connecting it to outcomes, you’re eroding your credibility within the C-suite. That’s the root cause of what Gartner found — 40% of CMOs who do that lose influence. And it’s not just the CEO. The CFO, the COO — it’s critical that they all understand why what we’re doing ties to business outcomes they care about.

Kelly: You also describe something called the monthly growth review as the meeting that fixes alignment faster than any dashboard. Can you walk us through what marketers need to do for CEOs to embrace their strategies?

Rich: If you have an hour, you start with a scoreboard — metrics that the CEO cares about: ARR, churn, acquisition cost, pipeline coverage, margin. Next, you go to drivers — what moved those numbers up or down? Next is market truth — what are customers saying or doing that’s different? Then decisions — what are we going to double down on, cut, or pause? And finally, the ask — what resources do you need, what do you need leadership to do, what trade-offs are there with other projects? If you think through having those five points on your agenda for your marketing meeting with your CEO or leadership, I’ve just found that to be a much more effective way to make sure they understand what you’re asking for and are aligned to it — because they can see how it ties to the business outcomes the business cares about.

Kelly: So one last question, which is one that I’ve been challenged with over the years as a marketer or working within an advertising agency environment. I frequently have found that many CEOs may give me four or five objectives and most likely very little budget with which to do all four. And I frequently have to go back and say, I can’t achieve all four objectives with this budget. Pick one. Talk to me about how those conversations should be held — because that to me is the thing that comes up all the time. Everyone wants to throw something in the bucket. The board wants to do this, this department wants to do that, another product wants to promote a little app. We can’t do it all with the money that we have.

Rich: Right.

Kelly: So to me, that’s the biggest challenge that marketers have — corralling the reality of what you have versus the budget.

Rich: Yeah, I think we’ve all been there many, many times where you’re given a set of objectives and a budget and the two just don’t align. And it is a critical skill for marketers who want to move into the C-suite to deal with those situations — because it’s pretty much constant. The key to success is coming back to business outcomes. Here are the objectives I’ve been given. Here’s what I think the business outcomes are that we’re looking to achieve. Ground everybody in that framework. Then move on to: last year or last quarter or prior history showed that to achieve that similar change in business outcomes, it took X amount of investment.

You now have the formula for what’s worked in the past. Apply that formula to the objectives going forward — and this is the budget it would suggest we need. That budget is going to be a lot higher than the one you were given. Then you have the conversation around, all right, if we achieved this before, what makes us think we’re going to do better with a smaller budget in the future? You might say something like: in order for us to do this with this budget based on what we’ve done before, we need to do some things differently — because if we do it the same way, we would need a much larger budget to achieve that objective. So we’re going to have to change something. Again, it’s really important to make sure that you’re speaking in terms of business outcomes as a business person and not using marketing terms when you have those conversations.

Kelly: I’ve found in the past when there are four or five different goals and you go back to the CEO to prioritize, that several of them may actually be box-ticking. I was asked to do X, Y, Z. I don’t care how much you spend on it. I just need to do something. I’ve checked that box. And that’s a challenging conversation to have, but it’s a clarity conversation.

Rich: No, 100%. And that is the reality. We’ve probably all been there — where you’re asked to do something you know is really not core to your objectives, and you know it’s going to eat your budget and probably not going to help you get closer to your ultimate goal. And it’s going to eat the time of your team. You’ve got to be able to push back in those situations in a way that’s going to be effective with your CEO. Ultimately, yeah, they probably want to check that box — but how badly do they want to check that box? Badly enough to take away from something else that might drive a business outcome they care about? The question you put back to them is: which do you want? Do you want this business outcome, or do you want a lower business outcome and check the box? You can’t have both.

Kelly: So back to branding for a minute. What is your perception in working with clients over the last couple of years post-AI world with regards to branding? Are companies more focused, less focused on branding and more focused on direct response just to get leads into the funnel, or is the brand as important as it ever was?

Rich: I think it’s just as important as it ever was and perhaps in some ways becoming even more important. Think about the impact that AI Search has had on the way we all — we’re all marketers, but we’re all consumers as well. And we’re all using AI tools these days. Things like AI Search have really changed the game because asking an AI search engine for a recommendation on a product or service is kind of like talking to a trusted friend. Whatever they tell you, you’re going to weigh a lot more highly than anything from an organic search that gave you pages and pages of websites.

So we have to think about, as marketers, there are really two dimensions to how we need to think about AI. The first is adoption — what tools and processes are you going to bring into your organization to make you more efficient, more cost-effective, provide a better customer experience? That’s the side most people focus on. What I think is being undervalued is what I would call adaptation. How are we adapting our go-to-market strategy for the AI reality that our buyers are going through? Are we doing things so we’re going to show up in AI search? Are we showing up in places where our buyers are thinking about a product or solution we’re offering?

Brand is really just a set of associations in the consumer’s mind with your logo, your organization, your company name. Being intentional about how you’re setting those associations leads to the things we talked about before — pricing power, improved conversion rates, lower acquisition costs, lower churn, more referral business. It’s a virtuous cycle that just pays for itself. But it’s a long-term investment, not a short-term one. And that’s where we run into problems.

Kelly: Agreed. Well, thank you very much for sharing your insights today, Rich. I will provide links to your website and your contact information in the transcript. Don’t forget to subscribe and share — and thanks for joining.

Rich: All right. Thanks so much, Kelly. I really enjoyed the conversation.