How to stop your marketing budget getting cut: the missing link between marketing roles and shareholder value

Marketing leaders face the ongoing challenge of justifying marketing investments to the board. The boardroom often sees marketing as a cost centre. More specifically, they struggle to grasp how specialist roles like Social Media Managers and Campaign Managers contribute directly to shareholder value.

However, the key is to show that marketing is not a cost but an investment, one that drives long-term business growth. When I work with leaders in my Marketing Leadership Mastery program, I help them bridge this gap and guide their teams toward understanding how each role in their marketing function links to long-term value creation.

Why this matters now more than ever

Marketing teams are increasingly complex, with specialist roles proliferating at a rapid pace. As the marketing function continues to evolve, the pressure to justify budgets grows. Marketing is often the first to face cuts when the connection between activities and shareholder value isn’t clear.

Moving beyond ROI: marketing as an investment

Marketing ROI is useful for measuring the short-term effectiveness of campaigns but insufficient for capturing the true, long-term impact of marketing on shareholder value growth. Marketing leaders who aim to justify marketing investments at the board level should shift their focus toward metrics that better align with long-term strategic goals, such as brand equity, customer lifetime value, and future cash flows.

Limitations of Marketing ROI:

1. Short-term focus: ROI typically focuses on immediate returns from campaigns, like sales increases or lead generation. This is a snapshot in time and doesn’t account for the long-term benefits marketing can generate, such as customer loyalty, brand equity, or future revenue growth.
2. Doesn't capture brand equity: Marketing efforts, especially in areas like branding, customer experience, or reputation building, can significantly influence brand equity, a key driver of shareholder value. ROI, however, doesn't quantify these intangible assets, making it harder to measure the full value marketing brings to the table.
3. Ignores lifetime value: Many marketing activities contribute to acquiring new customers or retaining existing ones, which impacts customer lifetime value (CLV). ROI often fails to capture the cumulative financial benefits of loyal customers who contribute to long-term revenue streams.
4. Risk and opportunity: Marketing investments sometimes create strategic advantages (like entering new markets or product innovation) that reduce future risks or opens growth opportunities. ROI doesn't factor in these kinds of strategic, forward-looking elements.

In my Marketing Leadership Mastery program, we explore how to move beyond ROI and adopt an investment mentality that emphasises future-focused metrics. This approach considers practical elements that truly drive shareholder value:

• Customer acquisition & loyalty - not just short-term revenue, but how each role contributes to the growth and retention of a customer base over time.
• Price optimisation - ensuring that marketing strategies enable customers to perceive more value, allowing for higher margins.
• Brand equity - how roles like Product Managers, Social Media Managers and Communications Managers strengthen brand awareness and image, which directly impacts the company's overall valuation.
• Risk mitigation - marketing decisions reduce business risks through strategies like market opportunity assessment and diversified customer bases.
• Operational efficiency - streamlining processes and cutting down duplicity across marketing roles can lead to cost savings and increased productivity.

Consider this scenario…

One of the most common challenges I encounter in the Marketing Leadership Mastery program is helping CMOs connect marketing roles – especially the emerging specialists’ roles - to broader business goals. Recently, I worked with a CMO from a large retail company facing pressure to justify the expansion of their marketing team, which included roles like Social Media Manager, Growth Marketing Manager, Communications Manager and Campaign Manager.

Each of these roles operated in silos, with little clarity on how their individual efforts connected to overall business objectives. While the team was producing impressive social engagement metrics, campaign ROI figures, and email open rates, the board saw these numbers as disconnected from the company’s bottom line.

Here’s how we tackled the issue:

• Social Media Manager: we redefined success metrics beyond follower count and engagement rates. By tying social media campaigns to customer lifetime value, we could show how this role contributed to long-term brand awareness and customer loyalty. By linking social media efforts directly to acquisition and retention strategies, we demonstrated the tangible impact of this role on shareholder value.
• Campaign Manager: here the focus shifted from immediate ROI to campaign-driven customer acquisition. We introduced metrics like cost-per-acquisition (CPA) and customer retention, linking campaign success directly to future cash flows and loyalty metrics that contribute to long-term growth.
• Growth Marketing Manager: the Growth Marketing Manager’s role was centred around experimenting with new channels to acquire customers. We used discounted cash flow models to show how successful growth initiatives would impact future revenue streams, demonstrating the long-term value that justified their position.
• Communications Manager: we connected brand-building activities, led by the Communications Manager, to brand equity growth. Stronger brand equity translates to pricing power and reduced customer churn, which can have a profound impact on a company’s future profitability.

By aligning each role's KPIs with the long-term objectives of the business, we built a compelling case for the board. The CMO was now able to show how each member of the team played a role in driving customer acquisition, retention, and loyalty, all critical drivers of shareholder value.

Breaking down silos and creating a unified marketing function

One of the biggest obstacles in linking specialist roles to shareholder value is the existence of silos within the marketing department. Without clear connections between roles and overall strategy, it’s easy for efforts to become fragmented, leading to inefficiencies, duplicity, and increased costs.

We addressed this by restructuring the team’s performance reviews to focus not just on individual success but on how each role contributed to the company’s broader strategic objectives. This alignment ensured that everyone, from the Social Media Manager to the Growth Marketing Manager, understood how their day-to-day tasks impacted long-term business growth.

By adopting an investment mentality and realigning KPI’s to focus on long-term business outcomes, CMO’s can present a stronger case for their team’s contribution to shareholder value. When the dots are connected, the board is less likely to see marketing as an expendable cost and more as a driver of sustainable growth.

If you need guidance and coaching to shift from ROI to Shareholder Value, please reach out !